As per the news sources, Federal government has agreed to pass on to consumers a Rs.1.39 per unit increase in electricity tariff in staggered manner.

The agreement was reportedly reached between the Pakistani authorities, the International Monetary Fund, the World Bank and the Asian Development Bank.

Finance Minister Shaukat Tarin, who is in Washington in talks with the International Monetary Fund, has concurred that the government will raise tariffs, according to sources.

Earlier, Prime Ministers Imran Khan and Tarin have publicly opposed the increase in the Tariff , as they say industry or other consumer groups are unable to bear the burden.

However, the tough attitude of the International Monetary Fund and the World Bank forced the government to change its previous position.

Sources said the government is awaiting a decision on Disco’s Tariff appeal, after which it will decide how much of the Tariff rate increase will be passed on to consumers.

In addition, the government will have to raise the base tariff by Rs. 1.50 per unit, since the capacity of newly installed coal-fired power plants is causing an increase of 200 billion rupees.

According to sources, an agreement between the government and the International Monetary Fund in Washington will lead to a new Circular Debt Management Plan (CDMP).

Pakistan has pledged in its fifth staff-level review talks in February 2021 that tariffs will be increased by 1.39 percent on June 1, 2021 as the second phase of the tariff.

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