Islamabad :
Pakistan has formally submitted a proposal to the World Bank to push for an increase in electricity tariffs in view of the third and more contagious and deadly wave of the COD 19 epidemic. Finance Minister Shaukat Tareen and the World Bank Group’s South Asia This was the main topic of a virtual meeting between Vice President Hart Wig Schaefer.
Minister for Energy Muhammad Hamad Azhar, Minister for Economic Affairs Omar Ayub Khan, Special Assistant to the Prime Minister for Finance and Revenue Dr Waqar Masood and Secretary Finance and Power Division were also present on the occasion.
The official statement said that Hartwig Schaefer expressed concern over the alarming rise in deaths and active cases during the third wave of COD 19 in South Asia and inquired about the latest health situation in Pakistan.
The Finance Minister said that Pakistan was facing a number of challenges during the third wave of Corona, adding that an aggressive smart lockdown policy has been adopted to control the Corona virus.
He said that Pakistan could also face difficulties in meeting its oxygen supply in a bad situation and the government was considering ways and means to increase oxygen production.
He said it was unfortunate that as Pakistan was heading for an economic downturn, it was hit for the third time by Code 19 and that the government may have to wait for a while to adopt a timetable for implementing drastic reforms. ۔
Briefing the meeting about the progress in the ongoing projects and programs of the World Bank, Secretary Power Division Ali Raza Bhatta pointed out that Pakistan was pursuing a targeted subsidy policy in the power sector.
“The government is committed to rationalizing subsidies (in phases) to improve efficiency and service delivery. It is against this backdrop that the government team developed tariff adjustments and timelines and put them forward,” he said. What
The Finance Minister said that social and economic development, better financial management, energy sector reforms, social sector development and increase in revenue are the priorities of the government. The Vice President of the World Bank appreciated Pakistan’s initiatives to deal with Corona.
It is to be noted that the government has already shared with the World Bank a revised revolving loan scheme which includes repeated tariff hikes, several old independent power plants in the next two years, fuel conversion, reasonable tax matters. Payments and timely subsidy payments have been reviewed.
The World Bank was told that the government is committed to these measures, otherwise the revolving credit will exceed Rs. 47 trillion by the end of the financial year 2023.
The government has promised to generate additional funds of Rs 11 trillion to consumers through tariff hikes, improve bill collection by 5% to 96% and reduce system losses by about 0.7%. ۔
The average rate for FY 2023 is expected to be Rs 20-25 per unit while it is currently less than Rs 15.4 per unit.
Under the project, there will be no additional coal-fired power plants in the near future and the under-construction plant at IPPs and about 5,500 MW at Jamshoro One will be converted into Thar coal.
The project will also reach an agreement with the government on restoring the existing coal pricing formula, eliminating the dollar on its equity returns, shifting coal transportation to railways and streamlining sales tax billing procedures. Includes making.
The plan states that the general sales tax billed by IPPs was Rs 117 billion but GST of Rs 202 billion was collected from consumers, which means that the ‘additional GST’ of Rs 85 billion is federal. Going to the Board of Revenue. Removing this discrepancy will affect consumer prices by 85 paisa per unit.
Similarly, adjustments in fuel taxes (customs duty, GIDC, excise duty, import duty, etc.) are expected to save consumers 22 paise per unit.
The government has already announced 11 IPP plants of 2,300 MW which will be purchased through Sukuk and Pakistan Investment Bonds at a discounted price of Rs 150-200 billion.
The committee will make a detailed legal, technical and commercial analysis of the parameters of power purchase agreements with implementation agreements with 11 IPPs and then consider its removal recommendations and future action.
