IMF allows leeway on electric bills, raises gas prices by 50%.
ISLAMABAD -- The International Monetary Fund (IMF) has granted Pakistan permission to extend the payment of electricity bills for consumers using up to 200 units over three months. In exchange, Pakistan has to announce an increase in gas prices of up to 50% effective from July and a crackdown against electricity theft.
This understanding between the IMF and Pakistani authorities is pending approval by interim Prime Minister Anwaarul Haq Kakar and his cabinet, according to sources in the energy ministry.
The sources revealed to The Express Tribune that the IMF has conditionally approved the gradual payment of August's electricity bills over three months for consumers not eligible for subsidies and using up to 200 monthly units. Lifeline consumers and those within this consumption bracket who are protected from price increases will not be eligible for this temporary relief.
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As a result, only around four million consumers, approximately 10% of the total, will be eligible for this assistance. The government had initially requested permission to stagger bills for consumers using up to 400 monthly units, which would have benefited 32 million consumers or 81% of the total, but this request was not accepted by the IMF.
For consumers using up to 100 units, the government raised prices by Rs7.28 per unit, bringing the cost to Rs24.21 per unit. For consumers using 101 to 200 units, the price increased by Rs8.28 per unit, reaching Rs30.68 per unit. These increases in electricity bills prompted public outrage.
Interim Energy Minister Mohammad Ali did not respond to requests for comment on this matter. However, the temporary relief for electricity consumers will come at a cost for gas sector consumers. The IMF has stipulated that Pakistan must simultaneously announce relief for a specific group of power consumers, initiate a crackdown against theft and low bill recoveries, and notably, increase gas prices.
The IMF has urged Pakistan to increase gas prices, which have already been determined by the Oil and Gas Regulatory Authority (OGRA) but remain pending notification. The previous government did not raise gas prices due to political considerations, contributing to circular debt in the gas sector.
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In June, OGRA announced a 50% increase in gas prices for consumers of the Sui Northern Gas Pipeline Limited...
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