Pakistan PM orders ‘exemplary punishment’ for officials found overcharging electricity consumers

Muhammad Noshad, a Pakistani employee of the state-run Islamabad Electric Supply Company (IESCO), takes a meter reading with his smartphone at a commercial building in Islamabad on November 7, 2018. (AFP/File)
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Updated 07 July 2024
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Pakistan PM orders ‘exemplary punishment’ for officials found overcharging electricity consumers

  • Inquiry report last year revealed 13.76 million Pakistanis were charged for over 30 days of electricity usage 
  • PM Shehbaz Sharif directs authorities to suspend guilty officials, register cases against them 

ISLAMABAD: Prime Minister Shehbaz Sharif this week directed authorities to take strict action against officers of power distribution companies who were found guilty of overbilling consumers, state-run media reported, as Pakistani brace for another massive power tariff hike this month. 

Last year, the National Electric Power Regulatory Authority (NEPRA) disclosed that Pakistan’s power distribution companies had charged excessive bills to consumers by adopting “illegal and unlawful practices.” This was revealed in a 14-page inquiry report after nationwide protests broke out last year in Pakistan over inflated bills. 

The inquiry report revealed the billing cycles carried out by distribution companies ranged from 30 days to 40 days and even more. As per notified tariff terms and conditions, a billing period means a billing month of 30 days or less reckoned from the date of the last meter reading. 

The inquiry report revealed that 13.76 million people were charged for more than 30 days of electricity usage, while 0.4 million were sent average bills due to faulty electricity meters.

“The prime minister said that exemplary punishment should be given to those officials who had included extra units in the monthly bills of consumers with their anti-public attitude, besides unmasking them who had sent extra units to the protected consumers’ category, using less than 200 units per month,” the Associated Press of Pakistan (APP) said. 

This was said by PM Sharif as he chaired a high-level meeting to review reforms in the power sector on Saturday, APP reported. 

The Pakistani premier tasked the power division to suspend such individuals and ordered the Federal Investigation Agency (FIA) to register cases against them.

He directed authorities to accelerate their efforts and tap into producing power from renewable energy resources, adding that Pakistan could no longer afford to generate power on imported fuel.

“He also expressed his resolve not to pass on the buck to the poor segment of society of the wrong policies and measures of the past,” the state media said.

Pakistan’s National Electric Power Regulatory Authority (NEPRA) has called a public hearing on July 8 on the question of passing on more than Rs700 billion additional burden to electricity consumers during the current fiscal year by jacking up the average national tariff by around Rs5.72 per unit. 

The South Asian country approved the tariff to strengthen the government’s position in securing a fresh financial bailout from the International Monetary Fund (IMF) as it tries to wiggle out of a macroeconomic crisis. 


IMF Executive Board to review $1.2 billion loan disbursement for Pakistan today

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IMF Executive Board to review $1.2 billion loan disbursement for Pakistan today

  • Pakistan, IMF reached a Staff-Level Agreement in October for second review of $7 billion Extended Fund, climate fund program
  • Economists view IMF bailout packages as essential for cash-strapped Pakistan grappling with a prolonged macroeconomic crisis

ISLAMABAD: The Executive Board of the International Monetary Fund (IMF) is set to meet in Washington today to review a $1.2 billion loan disbursement for Pakistan, state media reported on Monday.

Pakistan and the IMF reached a Staff-Level Agreement (SLA) in October for the second review of a $7 billion Extended Fund Facility (EFF) and the first review of its $1.4 billion Resilience and Sustainability Facility (RSF). 

The agreement between the two sides took place after an IMF mission, led by the international lender’s representative Iva Petrova, held discussions with Pakistani authorities during a Sept. 24–Oct. 8 visit to Karachi, Islamabad and Washington D.C.

“The International Monetary Fund’s (IMF) Executive Board is set to meet in Washington today to review and approve $1.2 billion in loan for Pakistan,” state broadcaster Pakistan TV reported. 

Pakistan has been grappling with a prolonged macroeconomic crisis that has drained its financial resources and triggered a balance of payments crisis for the past couple of years. Islamabad, however, has reported some financial gains since 2022, which include recording a surplus in its current account and bringing inflation down considerably.

Economists view the IMF’s bailout packages as crucial for cash-strapped Pakistan, which has relied heavily on financing from bilateral partners such as Saudi Arabia, China and the United Arab Emirates, as well as multilateral lenders including the IMF, World Bank, Asian Development Bank and Islamic Development Bank. 

Speaking to Arab News last month, Pakistan’s former finance adviser Khaqan Najeeb said the $1.2 billion disbursement will further stabilize Pakistan’s near-term external position and unlock additional official inflows.

“Continued engagement also reinforces macro stability, as reflected in recent improvements in inflation, the current account, and reserve buffers,” Najeeb said.

Pakistan came close to sovereign default in mid-2023, when foreign exchange reserves fell below three weeks of import cover, inflation surged to a record 38% in May, and the country struggled to secure external financing after delays in its IMF program. Fuel shortages, import restrictions, and a rapidly depreciating rupee added to the pressure, while ratings agencies downgraded Pakistan’s debt and warned of heightened default risk.

The crisis eased only after Pakistan reached a last-minute Stand-By Arrangement with the IMF in June 2023, unlocking emergency support and preventing an immediate default.