Interim government unveils ‘Power Relief Plan’

ISLAMABAD: In a move aimed at alleviating the burden of soaring electricity bills on the public, the interim government has crafted a strategic plan to provide relief to consumers grappling with exorbitant charges.

Under this initiative, users consuming 300 units of electricity will see a reduction of Rs3,000 in their bills.

Reports indicate that electricity bills for consumers utilizing 300 units during September will witness the aforementioned reduction. However, the implementation of this policy hinges on approval from the International Monetary Fund (IMF).

Just a few days ago, the government presented a proposal to the IMF, seeking to ameliorate the electricity bill-related concerns of the populace. This proposal triggered nationwide protests. The government, nonetheless, assured that it would uphold all targets previously agreed upon by the former administration.

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Caretaker Minister for Finance, Dr. Shamshad Akhtar, confirmed that a team of Pakistani officials engaged in discussions with the IMF. While she wasn’t part of the negotiating team, she reiterated Pakistan’s commitment to adhere to the IMF program.

There are indications that the budget for the fiscal year 2023-24, allocated Rs250 billion as an emergency measure within the IMF program, might be employed to provide relief to electricity consumers.

It is expected that the IMF will respond on Thursday, with consumers using up to 300 units anticipated to benefit from the relief.

Sources suggest that the IMF may not endorse a reduction in the taxes imposed through electricity bills, but it may consider allowing the collection of outstanding amounts for the months of August and September in installments.

The caretaker Prime Minister, Anwaar-ul-Haq Kakar, and his administration in Islamabad have been vigorously pursuing the IMF’s support to provide immediate relief for electricity consumers in a country grappling with severe inflation and mounting financial challenges.

The interim prime minister had previously expressed optimism that the IMF would approve the government’s relief proposal within 48 hours, but the awaited response has yet to materialize.

Under the proposed plan briefed to the IMF, a portion of the tariff—up to 30% for August and September—would be gradually reduced, with the impact passed on to consumers over six months, spanning from October 2023 to March 2024.