The International Monetary Fund (IMF) has firmly opposed the federal government’s recent proposal to delay the increase in electricity bills for consumers using 201-400 units per month.
Prime Minister Shehbaz Sharif suggested postponing the Rs. 7.12 per unit price hike for three months and instructed the Ministry of Energy and the Ministry of Finance to find a solution and secure IMF approval, according to the Express Tribune.
The IMF has objected to delaying the price hike for middle-income consumers, warning that it would conflict with energy sector targets related to reducing circular debt and maintaining annual base tariffs. Approximately 2.8 million residential consumers fall into the 201 to 400 units category, who are already paying significantly more than the average price of Rs. 33 per unit after the recent increase. The government’s decision to raise prices by Rs. 7.12 per unit affects 2.2 million consumers using 201 to 300 units, with a new rate of Rs. 34.26 per unit. For those using 301 to 400 units, the new rate is Rs. 39.15 per unit, excluding taxes and surcharges.
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Previously, the government deferred the increase for consumers using up to 200 units, benefiting a large majority but only for a limited period.
Due to policy decisions by the IMF, the World Bank, and successive governments, electricity prices have become unaffordable, averaging Rs. 70 per unit after the recent hike. The IMF had earlier rejected Pakistan’s request to spread out August’s electricity bills over six months, reflecting its firm stance against temporary relief measures. Additionally, the government is considering ending the provision of free electricity to government officials, bureaucrats, judges, and parliamentarians as part of an emergency plan. This plan may also include ending free petrol and reducing Maximum Demand Indicator (MDI) charges for factories.
