According to a report in the Daily Jang, the government has made the decision to extend the duration of peak hours for electricity in order to meet the requirements of the International Monetary Fund (IMF). This change took effect on July 1.
Peak hours refer to the period of the day when there is the highest demand for electricity, and consumers are charged the highest rate per kilowatt-hour used. The peak hours have now been increased by two hours, shifting from 6pm-10pm to 5pm-11pm, as stated in the publication.
Under the new arrangement, consumers with time-of-use meters will be charged Rs49.35 per unit during the extended peak hours from 5pm-11pm. After the peak hours, the rate will decrease to Rs33.3 per unit from 11pm-5pm.
For consumers with three-phase meters, the tariff during peak hours has increased to Rs50 per unit, compared to the previous rate of Rs30 per unit.
The government’s objective in extending the peak hours is to generate additional revenue to cover line losses and address the circular debt in the power sector. They aim to collect over Rs3 trillion from the public.
Furthermore, the government has instructed the Oil and Gas Regulatory Authority (Ogra) to develop a plan for increasing gas rates. Ogra is considering raising gas rates by up to 50%.
To meet the demands of the IMF, the government has implemented various measures, including raising power tariffs, petroleum prices, and income tax. However, these actions have further burdened the public, as inflation remains high.
In an effort to stabilize the economy, the State Bank of Pakistan (SBP) recently received $1.2 billion as the first instalment of a $3 billion bailout from the IMF. Additionally, Pakistan received financial support from the UAE ($1 billion) and Saudi Arabia ($2 billion) to avoid a sovereign debt default, as both countries were assured by the agreement reached between Islamabad and the IMF in late June.
