In an attempt to give relief to the masses in electricity bills, the interim government is preparing to send a written plan to the International Monetary Fund today (Wednesday) seeking the Fund’s nod for a change in the tariff and taxes, sources said on Wednesday.
The IMF has demanded the plan after the government approached it over the issue and the documents could be sent as early as tonight, said the sources.
The move comes as Caretaker Finance Minister Shamshad Akhtar faced tough questions at the Senate standing committee on finance about inflated electricity bills.
The IMF approved a $3 billion standby arrangement for Pakistan a month before the elected government completed its term. The first of the loan tranches was released to the Shehbaz Sharif-led government and the second will be released to the interim government.
Under the agreement, the government has withdrawn subsidies for electricity consumers. Consequently, residential consumers received inflated electricity bills in August and went up in arms.
The caretaker government promised it would offer relief to people who held nationwide protest this week. However, at three meetings it held from Sunday to Tuesday, the government realized that it needed the Fund’s approval for decisions involving monetary issues.
Caretaker Finance Minister Dr Shamshad Akhtar has held virtual talks with IMF’s Resident Representative for Pakistan Esther Perez Ruiz regarding the electricity tariffs, where Ruiz asked for a written plan from the interim government for electricity bill collection and relief measures, sources told Aaj News on Wednesday.
On August 29, the government decided in principle to adjust the electricity bills of July in the monthly bills during the upcoming winter season when the bills are lower due to a drop in consumption of electricity. However, the decision is subject to approval from the IMF.
The restoration of one-slab benefit for the households also came under consideration; however, the government is afraid of violating the agreement with the IMF, sources said.
According to the sources, the government cannot reduce the price of electricity due to its agreement with the IMF, but it is ready to collect the bills in instalments.
Countrywide protests and strikes continued days after power consumers received their tax-laden inflated monthly bills.
Domestic and commercial consumers blocked roads and burned bills in different cities as they demanded the government slash the taxes.
Speaking at a meeting of the Standing Committee on Finance chaired by Senator Salim Mandviwala, Dr Shamshad Akhtar said that the impression that the caretakers have unlimited powers is not correct. We have limited powers and will work within them, she told the panel has she faced questions about inflated electricity bills.
The minister said that the previous elected government signed an agreement with the IMF and the caretaker government cannot do anything in this regard.
Akhtar also said that dollar inflows could be hampered if the IMF deal was not followed, since it was linked to aid Pakistan had received from friendly countries.
She also added that the next government would need to engage with the independent power producers to beign reforms into thepower sector.
Akhtar said that the proposal to withdraw the benefits to the privileged class is under consideration.
Senator Kamil Ali Agha demanded that the taxes levied in electricity bills should be withdrawn immediately.
