Web Desk (LTN NEWS): On Friday, Finance Minister Miftah Ismail said that the government was looking at different ways to help people with high electricity bills.
Prime Minister Shehbaz Sharif told a press conference in Islamabad that he has set up a committee to figure out how to help people who use between 200 and 300 units of electricity per month.
Ismail said that there were two reasons for the higher electricity bills: the increase in tariff that was required by the International Monetary Fund (IMF), and the fact that it was more expensive to make electricity in May because of the warmer weather.
“We expected to pay Rs6 per unit, but we ended up paying around Rs100 because coal became very expensive and gas prices hit all-time highs. May was a hot month. There was a time when people used more than 30,000 megawatts of electricity. We made 25,000MW, which is the most we could.
The minister said that the government had turned on all power plants to meet the higher demand for electricity. This included a furnace oil plant in Jamshoro, which had a variable cost of Rs69 per unit and had been turned on.
“In May, temperatures were five to seven degrees Celsius higher than usual,” he said, adding that the cost of making more electricity went up because spot rates were higher in March and April.
He explained that in June, the Power Division sent a summary to the National Electric Power Regulatory Authority (Nepra). After that, hearings were held, and in July, the regulator gave permission to include the fuel charges adjustment (FCA). Because of this, he said, the FCA was added to the bills for that month.
Ismail said that the prime minister was “very worried” about how the fees would affect small consumers. He also said that the Power Division had told the IMF that the government would get rid of FCA for people who use less than 200 units.
“This will cost the government Rs20-21 billion. We have taken away FCA from 56% of our customers.”
The minister also said that people who hadn’t paid their bills yet would get new ones with the right amounts, and people who had already paid them would see the amount change on their September bills. He also said that the government had changed the date for the last day to pay bills to August 31.
In response to a question, he said that the government hadn’t bought too much fuel to make electricity because there was a lot of demand in May. “We need 800MW more electricity for every 1°C rise in temperature.”
On Wednesday, Minister for Power Khurram Dastgir said that people who use up to 200 units of electricity would not have to pay FCA. He said that this would help 17 million people and cost the national exchequer Rs22 billion.
Last month, the Nepra gave distribution companies permission to charge an extra Rs155 billion to make up for the higher cost of making fuel in June.
The authority gave K-Electric an FCA of Rs11.37 per unit, which was a first, and gave Discos, which used to be owned by Wapda, an FCA of Rs9.89 per unit.
The government also said that the average base tariff across the country would go up by Rs7.91 per unit in three stages starting in July. As part of a quarterly change, it had agreed to raise the base tariff by Rs1.55 per unit across the whole country.
IMF and other money sources
During his press conference today, Ismail said that the IMF’s Executive Board would meet between August 29 and 30 and approve Pakistan’s loan. “We’ve met all the requirements,” he said again.
There were rumors that the government was going to sell Pakistan International Airlines, which owns the Roosevelt Hotel in New York, or the airline itself to Qatar.
He said that the Gulf country was mostly interested in long-term leases for Pakistan’s airports and running them, as well as building port terminals, LNG plants, and large-scale solar farms.
He was happy that Qatar said it would invest $3 billion in Pakistan and said that with the money, Pakistan had gotten $5 billion in funding, which was more than the $4 billion the IMF had asked for.
PML-N leader Abid Sher Ali criticized Ismail for his “policies against the people.” In response, Ismail said the country needed $40 billion to deal with its current account deficit and debt repayments.
“We didn’t have that much money, and we could see that we were going to be in trouble. It had to be done to keep the country from going bankrupt. I ask Abid Sher Ali and all of my other brothers to tell me if I ever did something that Shehbaz Sharif didn’t like.
“If the petroleum levy or FCA is put in place, it is with PM Shehbaz’s approval. It’s easy to say bad things about me, but everyone knows the truth.”
