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Tuesday, July 23, 2024

Will Interim govt succeed in providing relief for consumers on electricity bills?

The interim Prime Minister had previously expressed confidence that the IMF would endorse the government's relief proposal, aimed at easing the financial burden on the public, within 48 hours. However, there has been no response from the IMF after the deadline lapsed.

In the midst of widespread nationwide protests against surging electricity bills, the interim government has reportedly devised a strategy to provide relief to electricity consumers, as per insider sources to a local media outlet.

These sources indicate that the interim administration intends to grant relief of up to 3,000 to consumers who have used up to 300 units of electricity in their October bills. Similarly, consumers facing electricity bills ranging from Rs60,000 to Rs70,000 will experience a reduction of Rs13,000.

Concurrently, discussions are underway between the International Monetary Fund (IMF) and the caretaker government concerning potential measures to alleviate the burden on electricity consumers, reports Geo News.

The IMF has requested additional data from the Power Division to make an informed decision regarding various proposals submitted to them seeking relief from the substantial electricity bill increases in August and September.

Read more: Protests erupt nationwide as electricity bills anger citizens

Insiders familiar with the IMF’s perspective indicate that representatives from the Power and Finance Divisions are currently engaged in intense negotiations with IMF officials, focusing on the data related to the proposed measures to reduce power tariffs. They are assessing the potential repercussions on circular debt, cash flow, and the possibility of further delays to Independent Power Producers (IPPs), which could exacerbate the power sector’s sustainability challenges.

In response to continuous protests by citizens and traders against steep electricity bill hikes and added taxes, the caretaker Prime Minister, Anwaar-ul-Haq Kakar, and his administration in Islamabad are actively seeking the IMF’s cooperation to provide immediate relief to electricity consumers in this financially strained nation, already grappling with soaring inflation.

The interim Prime Minister had previously expressed confidence that the IMF would endorse the government’s relief proposal, aimed at easing the financial burden on the public, within 48 hours. However, there has been no response from the IMF after the deadline lapsed.

The proposed plan involves reducing a portion of the electricity tariff, up to 30% for August and September, with the impact of the reduced tariff gradually benefiting consumers during the winter season, spanning from October 2023 to March 2024.

Amidst persistent and unannounced power outages and soaring electricity bills, frustration and protests peaked across the country, particularly in Khyber Pakhtunkhwa (KP). The “Don’t pay electricity bills” movement gained momentum as citizens voiced their discontent.

In response, the Jamaat-e-Islami (JI) declared a nationwide strike on September 2 in protest against the escalating electricity prices, which have triggered widespread public outrage.