Power tariff in Pakistan to go up by Rs7.14 per unit 

Islamabad: Amidst a devastating energy crunch in Pakistan, the government has decided to gradually revive the stalled International Monetary Fund (IMF) programme under the USD 6 billion Extended Fund Facility (EFF)—raising the electricity tariffs by Rs7.14 per unit along with hiking the petrol prices.  

Authorities privy to the development stated that electricity tariff will increased by Rs4.79 per unit as the base price, while to arrange fuel price adjustments rates will have a surge by another Rs2.35 per unit.

According to details, the government is planning to increase only petrol prices in the country while it will continue to provide subsidies on diesel.  

Pakistan and the IMF are scheduled to hold review talks from Wednesday (May 18) to renew attempts to reach a staff-level agreement so that the fund's executive board approves the delivery of the next USD 1 billion tranches.   

Notably, if the prices remain the same—during the current fiscal year— Pakistan would have to bear the cost of about Rs140 billion till June for a duration of four months.

However, in a bid to protect 30 million Pakistanis from a surge in inflationary pressures, the coalition government is forced to devise a mechanism for the placement of targeted subsidies identified through the National Social Economic Survey (NSER).

Additionally, the government is also under pressure to increase the tariffs on gas to improve the liquidity crisis faced by the Sui Southern Gas and Sui Northern Gas in Pakistan.

Moreover, if current POL prices in the international market remain intact, it is estimated that fuel subsidies might incur the cost of Rs118 billion.   

Furthermore, the government acknowledged that it requires Rs200 billion to pay to gas utility companies—bringing the total amount to Rs701 billion, or over 1% of GDP.   

In the meantime, with the delay in the revival of the IMF programme and falling foreign currency reserves, the PKR has hit an all-time low against the US Dollar—crippling the Pakistan’s economy further.