Islamabad:
Prime Minister Shehbaz Sharif announced Thursday to reduce electricity prices by 15% or 7.41 per unit due to seasonal tariff adjustments and by increasing the neutral subsidy in the budget to increase the consumption of the national network and provide comfort to families that fight financially
The benefit has been granted to about 40.3 million consumers, mainly 35 million residential users.
The prime minister announced the new electricity rates in the prime minister’s office, in a ceremony attended by people from all areas of life.
Prices have been reduced due to the quarterly adjustment of the rate, the monthly fuel cost adjustment, the consequent reduction of taxes and also by increasing the oil funded by oil, according to government officials.
There are around RS3.40 per reduction unit due to the quarterly tariff adjustment, less than RS1 per monthly reduction unit of fuel costs and subsidy by increasing in RS1.71 per unit, they added. This will reduce the invoice in RS6 per unit and after adding the impact of taxes on the reduced price, the total impact will be 7.41 per unit.
Compared to existing rates, national electricity prices have been reduced by RS7.41 per unit and the new average rate will be RS34.37 per unit, said Prime Minister and added that the price of electricity for industries has also been reduced by RS7.69 per unit to RS40.51.
The prime minister said his government had to face “greater difficulties” by convincing the International Monetary Fund to reduce electricity prices, although he was not willing to allow even the cutting of the neutral budget in prices.
“The IMF did not allow us to reduce prices by increasing the oil collection rate and then I had to tell them that I would talk to the IMF managing director to obtain permission, since there was no impact on reducing prices in the budget,” said Prime Minister.
The maximum relief of RS8.58 per unit or 12% has been announced for commercial consumers and 7.69 per unit or 13% for industrial consumers. Households have received relief from RS6.14 to RS6.71 per unit, a reduction from 17% to 32%.
The prime minister gave the credit to the reduction to the Minister of Power, Sardar Awasi Leghari, the privatization advisor Muhammad Ali and the work group of the Prime Minister on the National Coordinator of the Energy Sector, General Zafar, who made the difficult task of “convincing” the owners of the energy plants to renegotiate the terms of his agreements.
According to new rates, there is no reduction in the prices of lifeguards of up to 100 units that have already been paying much lower than the cost of the generation of electricity. The prices of protected residential consumers that have up to 100 consumption units have been reduced by RS6.14 per unit or 32% to RS8.52 per unit.
The prices of consumers protected with 200 consumption units have been reduced by RS6.14 per unit to RS11.51, excluding taxes. Consumers of up to 300 units will obtain a benefit of RS7.14 per unit, but their rate will be RS34.
Residential consumers of more than 300 consumption will obtain a relief from RS7.24 per unit and their new rate will be RS48.46 per unit.
The average price for the national consumer will be RS31.63 with a cut of RS6.71 or 17%.
This remains a small relief, which has been obtained through ingenious methods, said the prime minister, while recognizing the difficulties faced by households and industries.
A pensioner stayed with empty pockets after paying their electricity bills and these high bills caused frustration and anger among people, admitted the prime minister. He said the government was making structural reforms in the electricity sector to guarantee greater relief for consumers and the general development of the country. “This reduction will help industrialists produce cheaper and competitive products.”
The revised rate of commercial consumers will be RS62.47 per unit with a 12%reduction. The new industrial consumers rate will be RS40.51 per unit after RS7.69 or a 13%reduction. The agricultural rate will be RS34.58 after the reduction of RS7.18 or 17% in prices.
The Prime Minister also established the agenda for more reforms in the electricity sector, giving a task to his “star equipment” to start working to eliminate more than RS600 billion per year of losses due to theft and the low recovery of the bills.
The prime minister said that the other two objectives for his government were to establish an open electricity market and privatize or provincialize energy distribution (disc) companies to reduce the load of line losses and the theft of energy in the national act.
Apprecious the working group formed to finish energy reforms, the prime minister said that the force worked very hard and through their innovative thoughts, brought different options and managed to convince the IMF to reduce power tariffs.
“We do not transmit the low international oil prices and retain prices to ensure that the government reduces power tariffs to which the IMF agreed in principle,” he added.
The prime minister said that the Government negotiated successfully with independent energy producers (IPP), which will save RS3.7 billion for a period of three years to 25 years from the remaining useful life of these energy producers.
The prime minister said that the circular debt of RS2.4 billion is also being treated, which will take to zero for a period of five years.
The prime minister said that Pakistan was on the verge of breach more than a year ago and that he had to supervise that credit letter for the importation of oil products and other essential items open in time. “We had no resources to execute the energy sectors too,” he added.
The prime minister said that Pakistan’s economy had now stabilized and was moving towards sustainable growth and development.
“The country’s economy needed surgical operation to get rid of all the problems responsible for the crisis in the economic sector,” he added.
