Another hike

5

 

The government has agreed with the IMF that Rs2.5 per unit shall be charged from electricity consumers from next month. This is one major condition by the Fund to reduce the circular debt. This exercise shall be carried out on a quarterly basis and every quarter Rs150billion shall be collected from consumers.

The life of a common citizen is getting increasingly difficult. Only last month, the federal government approved an increase in gas tariffs by up to 190% and electricity prices by Rs1.5 per unit to recover an additional Rs334 billion from consumers. And here we have one more such step which is not going to be the last one. Combine this with the 190 per cent increase in the gas prices and one will know how difficult it is going to be for a low and middle income family to make its end meet.

The IMF has issued a detailed report before releasing the first tranche of the agreed package. The Fund is satisfied with the dollar exchange rate and calls it closer to ground reality. The dollar is trading at an all-time high against the Pakistani Rupee and selling at 164 in the open market. The currency depreciated by Rs4.5 in a single day. When the PTI came to power in August, 2018 the dollar traded at around Rs115.

The opposition parties are of the view that with the current trend going, the rupee may end up selling at 200 against one dollar.

The National Electric Power Regulatory Authority (NEPRA) soon after the budget speech approved an increase in per-unit price of electricity. Rs1.49 per unit increase cost consumers in excess of Rs189 billion.

Earlier for the month of April, NEPRA approved an increase of 55 paisa per unit in electricity tariff on account of fuel cost adjustment. Although the minister in the budget speech said that there is a certain amount allocated for subsidy on electricity for consumers consuming fewer than 300 units per month, this increase in tariffs looks to be implemented across the board. PoL products’ prices are already in the ascendance for a few months now. The price for petrol has gone up to Rs113 per litre.

There is considerable weight in the argument put forward by the opposition. They are of the view that the government has given in completely to the IMF and its former employees have occupied key posts in the financial sectors. The government needs to wrest back the control before its too late.