The federal government has formulated a strategy to collect an additional Rs721 billion from electricity consumers during the current financial year as per the conditions agreed with the International Monetary Fund (IMF).
According to the finance ministry sources, the government has shared its plan with the IMF, aimed at increasing the electricity tariff and reducing the power sector's circular debt.
The sources said that electricity rate would be increased by Rs1.25 per unit till September in terms of quarterly adjustment in electricity tariff. This, they added, would likely generate Rs39 billion in revenues.
During the September-December quarter, the sources continued, electricity likely to become further expensive by Rs4.37 per unit due to fuel adjustment, which would general another Rs122 billion till the end of 2023.
Furthermore, Rs560 billion would be generated by raising the price of electricity by Rs5.75 paise in annual rebasing. The sources said that the amount would be used to reduce the circular debt of the power sector.
As a result of these measures, the power sector's circular debt is anticipated to decrease from Rs2,700 billion in the previous fiscal year to Rs2,130 billion by the end of the current financial year in June 2024.
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