IMF decision pending: Relief for consumers using up to 300 units in October bills

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Amid widespread protests against inflated electricity bills, sources reveal that the caretaker government has devised a plan to ease the burden on power consumers.

According to reports, the interim government intends to grant relief of up to 3,000 to consumers utilizing up to 300 units in their October electricity bills. Similarly, consumers with bills ranging from Rs60,000 to Rs70,000 are expected to benefit from a reduction of Rs13,000.

Simultaneously, discussions between the caretaker government and the International Monetary Fund (IMF) are ongoing regarding relief measures for power consumers. The Washington-based global lender has reportedly requested additional data from the Power Division to decide on various proposals aimed at alleviating the increased bills for August and September.

“We have shared the required data with the Fund people, hoping that the IMF may respond today (Monday) with a decision on the proposals from the Finance and Power Divisions, seeking authorization for relief to the public affected by rising electricity bills,” disclosed sources familiar with the IMF discussions.

Presently, officials from both the Power and Finance Divisions are engaged in intensive discussions with IMF representatives, focusing on the data related to suggested measures to reduce power tariffs and their potential impact on circular debt, cash flow, and potential delays to Independent Power Producers (IPPs), which could further undermine the power sector’s sustainability.

In response to continuous protests by citizens and traders against the steep increases in power bills and additional taxes, the caretaker Prime Minister, Anwaar-ul-Haq Kakar’s administration in Islamabad has been working to convince the global lender to approve immediate relief for electricity consumers in the financially strained country, where people are already grappling with soaring inflation.

On August 31, the interim prime minister had expressed optimism that the IMF would approve the government’s proposal for relief aimed at providing relief to the public within 48 hours. However, no response was received after the deadline passed.

The IMF was previously briefed about the proposal, which involves scaling down a portion of the tariff—up to 30% for August and September—and passing on the impact of the reduced tariff to consumers over six months during the winter season, from October 2023 to March 2024, in a phased manner.