ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to provide Rs 65 billion to electricity consumers that was deferred in the form of Fuel Price Adjustment (FPA) during last summer’s peak. was
Out of the total outstanding amount of Rs 65 billion due to FPA deferral in electricity bills for the current financial year, the government has agreed with the IMF that Rs 55 billion will be transferred to consumers and its recovery from bills. will be done through The remaining 10 billion rupees will be obtained from the distribution of subsidy money.
In a grim scenario, Pakistan’s cash-bleeding power sector is fast heading towards bankruptcy, as its cumulative deficit for the current fiscal year could rise to Rs 1,734 billion following a stagnant approach.
Consumers, on the other hand, find themselves voiceless as the word reform implies an increase in tariffs but actually results in an increase in theft in the sector.
Out of the total losses of Rs 1,700 to 1,800 billion, Rs 1,000 billion in subsidies and Rs 700 to 800 billion in revolving credit are likely to pile up in the monster if no remedial action is taken by the government. Government
Now, multilateral lenders, including the IMF/World Bank, are asking the government to come up with financing plans for unbudgeted subsidies, including K-Electric’s subsidy for which the finance ministry had allocated Rs 26 billion against the revised estimates of Rs 162 billion. There is a gap of Rs 136 billion where no money was available to bridge the gap.
The same was the case for the Zero Rating Industry (ZRI) and Kisan Package for which the government did not allocate Rs 118 billion and Rs 28 billion respectively in the current financial year.
The IMF also expressed concern over the failure to collect deferred payment of bills on account of fuel price adjustments, estimated to cost Rs 65 billion. Bill collection was reduced to 92 percent from the original target of 93.58 percent, creating a gap of Rs 55 billion in the current financial year.
The power theft target was also missed as the target for transmission and distribution (T&D) losses was raised from 15.83 percent to 16.27 percent, which would result in a loss of Rs 31 billion.
Recovery of generation cost will cause a financial loss of 63 billion rupees. Rs 24 billion for May-23 and June-23 FCA and Rs 39 billion for Quarterly Tariff Adjustment (QTA) for FY-24-23 and Q4 FY-23.
The rise in markup in recent months also led to increased power sector liabilities as markup of IPPs and power holding companies increased to Rs 249 billion from Rs 185 billion, an increase of Rs 64 billion.
K Electric will have an additional burden of Rs 136 billion due to the subsidy resolution for which the Finance Division has not allocated any budget in the budget.
In the first quarter of the current financial year, the revenue decreased from 493 billion rupees to 347 billion rupees as the electricity demand decreased from 45 billion units to 40 billion units, resulting in a loss of 55 billion rupees. FBR is likely to incur a loss of Rs 91 billion in the current financial year due to unpaid GST.
Now it is expected that if the government does not increase the tariff, does not bring efficiency and does not improve the governance, then in the current financial year there may be a financial loss of 700 to 800 billion rupees. -Bleeding power sector.
