In a major upset, the Economic Coordination Committee (ECC) approved another increase of Rs7.91 per unit in the electricity prices. The approval comes as the International Monetary Fund (IMF) expressed its disapproval of the recently announced Budget 2022-23.
To clarify, the IMF found the proposed budget short of expectations and expressed concerns about the budget numbers, including fuel subsidies, a widening current account deficit, and the need to raise more direct taxes.
Therefore, in a bid to achieve the IMF program’s objectives, the Energy Ministry submitted a summary for increasing the electricity prices by Rs7.91 per unit, which the ECC approved. The increase in electricity prices will supposedly recover an additional Rs891 billion from consumers.
Read more: Budget figures may change to appease IMF
According to the details, the implementation of the Rs7.91 per unit increase will be done in three phases. The first phase of Rs3.50 per unit will take effect from July, the second, also of Rs3.50 per unit, from August, and the third of nearly Rs1 per unit from the following month, according to the decision.
IMF rejects budget. Amid the IMF’s disapproval of the new budget, the Economic Coordination Committee of the cabinet on Monday approved another increase of Rs7.91 per unit in the electricity prices to recover additional Rs891 billion from consumers. https://t.co/NGFX1nIVyo
— Shahbaz Rana (@81ShahbazRana) June 14, 2022
Worry for the public
Pertinent to mention, the public is already buckling under inflationary pressures. To appease the IMF, the government has so far increased the price of petrol, basic commodities like wheat and cooking oil, rolled back subsidies, and slapped more indirect taxes.
Times are certainly challenging for the public who also has to face frequent load shedding during this intense heat. The duration of unannounced load shedding nationwide remains between six hours to 14 hours. Seems like there is no relief for the average Pakistani.
The frequent load shedding in Pakistan comes after the electricity shortfall. While the current electricity crisis is another challenge for the incumbent government, there is no denying that it is the public who has to face the brunt of the failure of governance.
On another note, diesel and petrol prices could again rise by Rs53 and Rs18 per liter, respectively, if the government passes on the full impact of global oil markets to consumers, effectively eliminating the subsidy in an effort to repay the IMF loan.