ISLAMABAD: In a last-ditch effort to revive the stalled International Monetary Fund (IMF) programme, the government has drawn up a plan with four options for reducing revolving credit including maximum electricity tariffs. 31.6 per kWh can be increased. By imposing a new surcharge.
The proposal aims to impose a surcharge on five categories including commercial, bulk, industrial, other and general services while protecting the domestic and agriculture sectors. Top government sources confirmed to JEE News on Monday that the power sector is moving towards completely unsustainable levels as the power sector’s requirement may increase to Rs 1.73 trillion for the current fiscal year from the initial was allocated in the budget. 0.57 trillion mainly due to inadequate budget allocation.
Under the plan, there are four major proposals, three of which include hike in electricity rates in the range of Rs 2.27/kWh and Rs 12.59/kWh and levy a surcharge on all to a maximum of Rs 31.6/kWh. Five types of users.
To slap the surcharge, the government will have to amend the National Electric Power Regulatory Authority (Nepra) Act, 1997. Under option one of levying a surcharge of Rs 31.6 per unit, the price for commercial customers may go up to Rs 94 per unit. The current rate is Rs 49 per unit.
Bulk consumer rate from existing tariff of Rs.40 per unit to Rs.77.9 per unit, industrial customers from existing tariff of Rs.40 per unit to Rs.80 per unit, others Rs.77 per unit against existing tariff of Rs.40 per unit and general services. The tariff is Rs 77 per unit from the existing Rs 40 per unit. With an increase of Rs 12.50 per kWh, the tariff for commercial consumers under option two is Rs 67 per unit, bulk Rs 55 per unit, industrial Rs 56 per unit, others Rs 54 per unit and general services Rs 54 per unit. The unit will be
With the implementation of Rs 2.59 per unit surcharge, the tariff for commercial customers will be Rs 52 per unit, bulk Rs 43.37 per unit, industrial Rs 43 per unit, others Rs 42.4 per unit and general services Rs 42.8 per unit. Unit
In case of status quo and no increase in power rates under the fourth option, the total subsidy requirement during the current financial year is Rs 700 billion. A zero rating for Kisan package and export-oriented industries will increase the financial burden by Rs 146 billion and the IMF is asking to find resources for subsidies or it will add to the circular debt monster.
According to the plan to reduce the circular debt, four options are under consideration, under option one, the electricity rates will be Rs 31.6 per kilowatt hour, under option two, Rs 12.59 per kilowatt hour, with a subsidy of Rs 580 per kilowatt hour and Rs 2.27 per kilowatt hour. kWh has been increased. Under option three, billions of rupees and the subsidy requirements will increase to over 700 billion rupees without any increase in electricity rates.
When asked about the possibility of a hike in electricity rates, Finance Minister Ishaq Dar told JEE News on Monday that there was no consideration for a hike in electricity rates at present and he promised that when the electricity prices are revised We will discuss it in detail once the reduction plan is finalized. Revolving credit
However, government sources said the power sector faced a critical situation due to failure to implement all measures agreed with the IMF and the World Bank as the base tariff of Rs 7.91 per unit was partially implemented. , did not completely run on fuel. Price adjustments and quarterly tariff adjustments, less than 90 percent of bills collected against the target of 93 percent, failure to reduce transmission and distribution losses by nearly 17 percent against the target of 15.8 percent, in the first quarter. Power demand remained low at 44 billion units. Against the target of 45 billion units, additional subsidy requirements in respect of zero rating regime industry, Kisan Package and fuel cost adjustment and Karachi Interbank Offered Rates against the projected target of 10.5% at the time of Budget 2022-23. I stand at 15 percent. .
The current difficult situation of the power sector can be analyzed from the fact that the deficit of the power sector increased to over Rs 390 billion in the first quarter of the current financial year due to which the revolving credit increased.
Bills collection in the first quarter fell significantly as it stood at 83 percent against the target of 93 percent, with a financial impact of over Rs 100 billion. Electricity theft due to transmission and distribution (T&D) losses reached 17.4 percent against the set target of 15.8 percent, resulting in a financial loss of Rs 13 billion, partly due to a 7.91 per unit increase in tariff. Approved on quarterly tariff adjustment. Receivables of Rs 45 billion in the third quarter of the current financial year, FCA recovery of Rs 6 billion in November, while fuel cost adjustments of Rs 14 and 13 billion were deferred.
It was envisaged that the government would release a subsidy amount of Rs 46 billion but not a single penny was released in the first quarter of the current financial year. Markup of Power Holding Company and IPPs increased from Rs 39 to Rs 40 billion, affecting this account by Rs 1 billion. In the first quarter, the demand decreased from 45 billion units to 40 billion units, resulting in a financial loss of 55 billion rupees. In the first quarter of the current financial year, the uncollected GST to the Federal Board of Revenue of Pakistan (FBR) stood at Rs 31 billion. 34 billion rupees was lost in the first quarter of the current financial year due to the delay of the bill.
According to the revised circular debt reduction plan called the Circular Debt Management Plan (CDMP) which was discussed with the IMF and the World Bank, the target of bill collection has been raised from 93.5 percent to 92 percent. done which will have an adverse effect of Rs.55. Billion, T&D losses will accrue a burden of Rs 31 billion, failure to recover production costs will increase losses by Rs 63 billion, power holding companies and IPPs will increase markup by Rs 64 billion. Yes, non-allocation of K- will increase the fiscal deficit by 64 billion rupees. Electric subsidy will increase by Rs 136 billion, Rs 118 billion for export oriented industry and Rs 28 billion subsidy for Kisan package, additional burden of Rs 65 billion pending fuel price adjustment (FPA) and bills, electricity A loss of 55 billion rupees will be incurred due to low demand and the collection of variation GST will be 91 billion rupees. The revised CDMP estimates show that the total additional requirement of the loss-making power sector was Rs 780 billion as against the initial allocation of Rs 75-80 billion.
However, official sources say that the actual deficit may reach an additional requirement of 800 billion rupees instead of 700 billion rupees.
According to an official statement issued by the finance ministry, Dar chaired a follow-up meeting on energy sector reforms in the finance division on Monday.
Federal Minister for Power Khurram Dastgir Khan, Minister of State for Finance and Revenue Dr Aisha Ghos Pasha, Minister of State for Petroleum Mossadegh Masood Malik, SAPM for Finance Tariq Bajwa, Secretary Power and senior officers attended the meeting.
In the meeting, detailed discussions were held on the workable proposals presented by the concerned ministries to introduce reforms in the electricity and gas sectors with the aim of bringing efficiency in the system, reducing energy wastage and providing relief to the public. To be provided. At the end of the official statement, these proposals focused on bringing sustainability in the energy sector and thereby achieving economic growth in the country.
