Pakistan hikes power tariff despite Saudi bailout

ISLAMABAD: Just as Prime Minister Imran Khan placated the nation with news that Pakistan would receive a $6 billion relief package from Saudi Arabia, the Economic Coordination Committee (ECC) on Thursday announced plans to increase power rates for consumers using more than 300 units of electricity.
An increase in the cost of electricity was one of the conditions set by the International Monetary Fund (IMF) to secure a bailout package. The global financial institution has frequently told Pakistan to rationalize its expenses and take tough economic decisions.
According to the new rates, people consuming between 300 and 700 units of electricity will pay a 10 percent additional tax while those who use between 700 and 1,500 units will pay 15 percent.
Finance Minister Asad Umar said the decision was inevitable, citing the current economic challenges and the issue of circular debt as the prime reasons. However, he also added that the government had reduced the power tariff by five percent for the agricultural sector.
The ECC-approved power tariff will impact consumers from November.
While the prime minister has said that his government is likely to get monetary assistance from two other friendly countries in the upcoming days, Pakistan may still need additional aid from the IMF, in order for Islamabad to address the country’s structural economic imbalances and meet stringent financial conditions.