Govt ends electricity subsidy given to Kisan, exporters
To meet IMF conditions, Cabinet also approves plan to increase electricity prices
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Accelerating the efforts to meet conditions set by the International Monetary Fund (IMF), the federal cabinet has approved a plan to increase electricity prices and end subsidies, 24NewsHD TV channel reported on Sunday.
The federal cabinet approved a revised circular debt management plan through circulation in this regard.
According to the plan, which will be presented to the IMF, the government will jack up electricity prices by Rs7.91 per unit in four quarterly adjustments – Feb-March 2023, March-May 2023 June-Aug, and September-November.
Under the circular debt management plan, the government will charge Rs3.21 per unit from now onwards, Rs 0.69 from March-May and increasing again to Rs1.64 per unit from June onwards to August of 2023. From Sep-Nov, the govt will hike power tariff by Rs1.98 per unit.
The consumer base tariff will be increased from Rs15.28 per unit in June 2022 to Rs23.39 per unit till June 2023.
The government also approved to end electricity subsidy of Rs65 billion given to the exporters, with effect from March 2023.
The government will be able to get Rs 51 billion from the withdrawal of subsidy on electricity for exporters while Rs 14 billion will be collected by ending the subsidy on electricity under Kisan package from March 2023.
For the export sector, the subsidy of Rs 12. 13 per unit on electricity will be taken back.
About 250 billion rupees will also be recovered from electricity consumers by June 2023.
Under the plan, a surcharge of Rs 3.39 per unit will be levied, sources said.
Rs73 billion will be obtained from the increase in quarterly adjustments till June. In the quarterly adjustment, electricity will be expensive up to Rs 4. 46 this month, sources said.
The government is taking all the steps to continue the IMF loan program under Extended Fund Facility (EFF).
Reporter: Waqas Azeem