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Wednesday, July 17, 2024

Pay more in return for less!

Finance minister stated that zero load-shedding in the country will raise the per unit cost of electricity to Rs60 per unit and would be unbearable for consumers to pay fuel cost adjustments (FCA).

Increasing electricity generation costs, inflating per unit rates, and ultimately rising bills, electricity crisis has caused much havoc in the country. As a result of high cost of electricity production, as well as greater line losses and low billed amount recovery, Finance Minister Miftah Ismail has ruled out the possibility of zero load-shedding in the country in the near future.

In answer to questions during a press conference on Wednesday with the Minister of Defence, the finance minister stated that zero load-shedding in the country will raise the per unit cost of electricity to Rs60 per unit and would be unbearable for consumers to pay fuel cost adjustments (FCA).

Read more: Power crisis intensified: Are we heading towards stone age?

He stated that the relief granted to customers in terms of FCA from 200 to 300 units has been postponed and will be collected at a later date. He stated that the government would expand the budget deficit and mobilize from other sources to cover the costs of cash disbursements to flood victims as well as FCA charges for consumers who use 200 units per month.

The finance minister also blamed the former government for the country’s high electricity prices, citing the fact that no solar energy was added to the grid during the previous four years, and no transmission and distribution projects were performed.

The finance minister did not address the impact of tariff increases in the cost of power during the last four months, but he did seem hopeful that electricity prices would begin to fall in October. When asked about the potential of some fuel price relief, he stated that any reduction in petrol and diesel prices will be determined by worldwide pricing.

He stated that the previous government had not been able to reduce line losses or raise billed amount recovery during the last four years and had agreed to the International Monetary Fund (IMF) for collection of sales tax, petroleum levy on petroleum price, and electricity tariff increase. He criticized that the former government He stated that his predecessor made a written commitment to the Fund but did not follow through, instead offering an amnesty scheme and lowering electricity and petroleum tariffs by Rs5 per unit and Rs10 per liter, respectively.

He attributed the resumption of the IMF programme to the current government in order to save the country from default.

He stated that because the flood damage assessment has not yet been completed, it is difficult to determine the actual quantum of losses, though some varying figures were coming up, and that once the damage assessment is completed, the government would then make a decision either to approach donors and countries or not.

The finance minister also discussed about the continuous depreciation in Rupee despite the resumption of IMF programme. He explained that rupee fell against the dollar due to flooding and the prospect of an increase in the import bill because of rising commodity prices. He stated that the flood water had harmed cotton and other crops, but currently there is no need to import cotton from India or any other country.

Read more: Rupee continues to depreciate despite the revival of IMF loan programme

The Finance Ministry would release Rs10 billion to the NDMA for tents, while Rs70 billion would be generated or redirected from other resources for cash disbursement to four million females. Miftah Ismail, finance minister, has done good work and saved the country from default, according to Khawaja Asif, and the party will consider making him a senator.