Budget 2024-25: Pakistan likely to unveil relief package for power consumers

As per details, PM Shehbaz Sharif has directed that there should be no increase in power tariffs for those consuming 200-unit monthly consumers.

Sources from the Prime Minister’s Office have indicated that Shehbaz Sharif has rejected the economic team’s proposal to increase electricity rates for protected consumers.

Instead, a subsidy will be provided to these consumers, ensuring that approximately 20 million protected users will not face a hike in electricity tariffs in the upcoming fiscal year 2024-25.

The government is committed to providing a total subsidy of Rs. 160 billion to protected consumers by the end of the current fiscal year, the sources said and added that power tariff for other consumers will be jacked up.

The International Monetary Fund (IMF) has asked Pakistan to further increase in electricity prices, citing an additional burden of Rs 150 billion on the power sector, said sources.

According to sources, the IMF has asked the Ministry of Energy to increase the electricity tariff from Rs5 to Rs7 per unit in July.

The IMF has expressed concern over the failure to achieve the targets, and the power sector’s circular debt is expected to reach Rs 2500 billion by the end of the current financial year. The Ministry of Energy has been unable to control the circular debt, sources said.

The IMF has also asked the Ministry of Energy to share a plan to increase the power and gas tariffs in the next financial year. The mission is currently in talks with the Ministry of Energy officials to discuss the matter further.