ISLAMABAD: Power Division is said to be on track over energy sector structural reforms agreed with International Monetary Fund (IMF) as the financial impacts of quarterly adjustments and subsidies phasing out plan are being passed on to the consumers.
This was confirmed in background discussions with the Power Division officials dealing with structural reforms.
The government will recover Re0.57 per unit QTA in July 2022, following which Rs 1.55 per unit will be notified whereas impact of Re0.20 per unit will also be passed on to the consumers through rationalization of subsidies sans lifeline consumers. The officials further stated that IMF also wanted rebasing of tariff in January 2022 and July 2022 and the rebasing was finalized recently at a rate of Rs 7.91 per unit.
The ECC has already approved increase in base tariff by 7.91 per unit in three phases:(i) pass on Rs 3.5/unit in July 2022, Rs 3.5/unit in August and the remaining increase of Re 0.91/unit shall be passed on to the consumers in the month of October 2022; (ii) pass on Re0.20/unit as per subsidy reform phase-II from July 1, 2022; and (iii) uniform tariff so determined by Nepra and recommended by it as “final tariff” for notification in the official gazette, to be notified to the extent of modification and supersession of existing notified rate (inclusive of subsidy/tariff rationalization surcharge) in SROs 182 to 191/2021 of February 12, 2021, as amended vide SROs 1280 to 1289 (1)/2021 of October 01, 2021, and SROs 1419 to 1428 (1)/2021 of November 05, 2021.
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Nepra will finalise Schedule of Tariff (SoT) by segregating protected categories of consumers and unprotected categories of consumers as Power Division, after including approved subsidy of Rs 225 billion for the next fiscal year, has sent it to the regulator.
As the Federal Cabinet ratifies the ECC decision, which will now be done through circulation, will be sent to NEPRA for adjustment. According to the official, the stock of circular debt will be Rs 2.5 trillion by June 30, 2022 as substantial payments have been and are being made to the IPPs and fuel suppliers.
“We are compliant with the IMF’s structural benchmarks agreed by the government,” the official maintained.
Copyright Business Recorder, 2022