Govt approves imposition of additional electricity surcharges to meet IMF’s demand

• ECC has approved a surcharge of Rs 335 billion for electricity consumers.
• Power tariffs would rise by Rs 1.55 per quarter.
• A uniform tariff for K-Electric customers is also being considered.

The Government of Pakistan agreed to the International Monetary Fund‘s (IMF) demand on Wednesday and imposed a permanent electricity tariff of Rs3.23 per unit to recoup Rs335 billion from consumers, removing another impediment to reaching a staff-level deal.

The Economic Coordination Committee (ECC) of the cabinet, chaired by Finance Minister Ishaq Dar, approved the implementation of an additional surcharge of Rs. 3.39/unit for four months (total surcharge became Rs. 3.82/unit) under peer pressure from the International Monetary Fund (IMF).

As per the details, in the ECC meeting, approval was given to collect Rs 335 billion rupees as a surcharge from electricity consumers during the next fiscal year.

The ECC meeting also approved the implementation of a uniform tariff for K-Electric consumers. K-Electric consumers will have an additional burden from Rs.1 55 to Rs.4 45 per unit.

Details show that the Electricity consumer with 100 units will pay Rs 1.4 per unit, Rs 3.2 for customers with 700 units, and Rs 4.45 for temporary residential customers and industrial.

According to the specifics, the surcharge profits would be used to pay interest on power sector arrears owed to the government. It will be applicable to electricity consumers across the country.

Further ECC sources say that it has been decided to increase the power tariff by Rs 1.55 on a quarterly basis as well.

Last month the cabinet agreed to an additional surcharge of Rs3.82 per unit for four months, from March to June 2023, last month.  Furthermore, it approved Rs1.43 per unit tax for the next fiscal year in order to recoup Rs126 billion, which the IMF rejected.

After the IMF’s objections, the Electricity Division requested that the fee may be “enhanced to Rs335 billion for FY 2023-24 and onwards for the consumers”.

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