The federal government is mulling over the International Monetary Fund’s demand to end power subsidy for the release of $1 billion tranche loan.
If the government agrees to the international lender’s condition, the electricity tariff would be increased by Rs7 per unit.
According to sources, the government has discussed the hike with the IMF, while the latter has expressed grave concern over the huge circular debt of Rs2,600 billion.
The IMF has proposed an immediate sale of profitable power distribution companies and the transfer of loss-making distribution companies to the provinces.
Read Power charges likely to go up by Rs4.5
The sources said that the National Electric Power Regulatory Authority (Nepra) will provide assistance to the auditor general for the audit of state-owned companies, adding that there is also pressure on the government for the immediate privatisation of power plants.
They said that the electricity tariff will be increased in the next financial year 2022-23, with the government increasing the base tariff and quarterly adjustment.
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