IMF approval: New system for power tariff to begin

Islamabad: According to the instructions of SIFC (Special Investment Finance Council), the Power Division has submitted the draft of the new electricity tariff design to the Ministry of Finance to accelerate the economic development of the country as per the existing tariff system. In this regard, approval can be obtained from the IMF.

From the current tariff, nothing is being achieved except the economic misery, 98% of domestic consumers are subsidized to the tune of 631 billion rupees, the government share is 158 billion, the remaining costs are being borne by industrial, commercial and high-level consumers.

The officials of the SIFC Secretariat and the Ministry of Power said that the apex committee of SIFC held on January 3, 2024 had earlier directed the top officials of the power division to review the electricity tariff to set up the system in such a way that economic activity can accelerate on a high rate.

According to the details, SIFC was informed that the Power Division has completed its work for power tariff restructuring and will soon be submitted to the Finance Ministry for IMF approval.

The caretaker Ministry of Power Muhammad Ali affirmed that the Power Division has completed its work on restructuring the current electricity tariff system and submitted it to the Finance Ministry, which has sent it to the IMF for approval. 

He further stated that officials will raise for the approval of IMF the total cost of a power unit consists of 72% fixed charges and 28% variable charges but on the revenue side, fixed charges are only 2% and variable charges are 98%.

Officials have said that the relevant authorities have found a mismatch in the cost and revenue structure of the electricity tariff as 72% of the cost is fixed while the current tariff is only 2% revenue fixed and about 98% of the domestic consumers (29 million consumers) are covered. 631 billion rupees subsidy is being received by the domestic consumers.