NNA |
Update: May 14, 2022 10:41 a.m. STI
Islamabad [Pakistan]May 14 (ANI): Amid a devastating electricity crisis in Pakistan, the Pakistani government has decided to gradually relaunch the stalled International Monetary Fund (IMF) program by raising electricity tariffs as well as electricity prices. gasoline.
The Pakistani government has announced that under the $6 billion Extended Financing Facility (EFF) of the IMF program, it will raise electricity tariffs by Rs 7.14 per unit through the base price, while that adjustments need to be made to fuel prices by raising gasoline rates, reported The News International.
The Pakistani government plans to only raise gasoline prices in the country while continuing to subsidize diesel. In addition, the government is also trying to convince the provincial states to help absorb the cost of fuel.
According to a government official, electricity in Pakistan will be increased by 4.79 rupees per unit as the base price, while to arrange fuel price adjustments, fuel tariffs will be increased by an additional 2.35 rupees per unit, a reported The News International.
Reportedly, to curb any further circular debt escalation, the IMF is demanding an increase of Rs 7.14 per unit.
In addition, Pakistan and the IMF will hold review talks from Wednesday to renew attempts to reach a staff-level agreement for the fund’s board to approve the delivery of the next $1 billion tranches. , reported The News International.
Notably, if the prices remain the same, in the current financial year, the Pakistani government is expected to bear the cost of about Rs 140 billion till June for a duration of four months.
As a result, to protect over 30 million Pakistani households from a surge in inflationary pressures, the current government under the Benazir Income Support Scheme (BISP) is compelled to design a mechanism for the placement of subsidies identified through the new Socio-Economic Survey (NSER).
In addition, the government is also required to raise gas tariffs to ameliorate the liquidity crunch facing Sui Southern Gas and Sui Northern Gas in Pakistan, The News International reported.
In addition, the government has admitted that to repay Rs 200 billion to gas utility companies, it will need Rs 200 billion, bringing the total to Rs 701 billion or more than 1% of GDP. Moreover, if the current prices of POL in the international market remain unchanged, it is estimated that the fuel subsidies will cost Rs 118 billion.
Meanwhile, with the delay in reviving the IMF program and falling foreign exchange reserves, the Pakistani rupee hit an all-time low against the US dollar, further crippling the country’s economy.
Inflation in Pakistan crossed the double-digit mark in July, the highest increase in almost six years. (ANI)
