ISLAMABAD:- The Federal Government has jacked up electricity prices by Rs.7.91 per unit phase wise from today to meet the prior conditions of the International Monetary Fund (IMF).

Federal Minister for Power Khurram Dastagir and Advisor to PM Senator Musadaq Malik announced the decision on Tuesday here in Islamabad.

Dastagir said that the electricity prices will be increased through three phases up to Oct 2022.

According to the agreement with the IMF for revival of the stalled loan program, the government will increase the electricity prices will be raised by Rs. 3.5 per unit from 26 July 2022. The electricity prices will be further jacked up by Rs3.5 per unit in August. The government will then increase the tariff by Rs. 0.91 per unit in October, completing the total increase of Rs. 7.91.

After this increase the basic power tariff will be increased from Rs.17/unit to Rs.25 per unit in Oct 2022.

Dastgir said Prime Minister Shehbaz Sharif was keen to provide maximum relief to the public, and therefore, the approval was given only after 45 percent of the population was excluded from the increase in tariff.

The Minister said that the major part of this increase in electricity prices due to high fuel surcharges. After the imposition of the tariff, the fuel surcharges would decrease as 90 percent of the total amount would be covered in the newly approved tariff, he said.

Khurram said that next three months are difficult for the nation due to high electricity production cost, however, there will be a decrease in electricity prices after November of this year.

Dastgir mentioned that receivables of the Power Division increased from Rs. 300 billion to Rs. 1000 billion during 4 years of previous government led by Imran Khan.

He said that the new coalition government has paid Rs. 214 billion dues for reducing the circular debt. After this payment to power sector, the stock of circular debt reduced from Rs. 2,476 billion on 31 March 2022 to Rs. 2,253 billion on 30 June 2022.

On this occasion, Petroleum Minister Musadegh Malik said that what has happened is not under our control, new government has to pay the prices of three years.

On this occasion, Petroleum Minister Mossadegh Malik said that what has happened is not under our control, we have to pay the price of three charbars.

Minister of Petroleum, Musadik Malik, revealed that by excluding the protected sector, the households with consumption of fewer than 200 units per month, i.e., 13 million connections or up to 90 million people had been omitted from the hike.

The analysts believe that the decision will be helpful to slow the buildup of the circular debt which will positively translate into budget deficit as government government paying subsidy to bridge the gap between production cost and recovery.

They also believe that the country will also reach one step close to the destination for revival of IMF loan Program by end of Aug 2022.

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