ISLAMABAD - The PML-N regime that came to power on promise of ending energy woes of the people has ‘gifted’ them with an unprecedented power tariff hike of 40 to 210 percent ahead of Eid.
This record breaking tariff raise, applicable from today for domestic and agricultural consumers, comes with the withdrawal of Rs140 billion annual subsidy on electricity, as per the loan deal struck with the IMF, and it is likely to invite a fierce reaction from the public and opposition parliamentarian.
The domestic consumers using up to 200 units of electricity are exempted from this price increase, according to a notification issued by the ministry of water and power on Monday. But it shows Rs5.89 per unit increase for the domestic consumers using power from 201 to 300 units. Now they will have to pay Rs14 per unit instead of Rs8.11.
In the same way, Rs3.67 per unit has been increased for the consumers using 301 to 700 units. They have to pay Rs 16 per unit instead of Rs12.33. Consumers using 701 and more units per month will pay Rs2.93 per unit more. For them the per unit rate will be Rs18 instead of Rs15.01.
The domestic consumers having ‘Time of Use’ meters can bear Rs4 per unit hike in the peak hours as the new per unit power price during peak hours will stand at Rs18/unit while during off peak hours, they will have to pay Rs12.50/unit. The notification also shows Rs3.58 per unit heavy hike in the power tariff for agri consumers as the new per unit price for them will stand at Rs10.35.
The Pakistan Muslim League-Nawaz (PML-N) in its election campaign had also promised to put the country on the party of self-sufficiency and not to seek foreign loans. But it did enter into an International Monetary Fund (IMF) loan program that requires the country to withdraw subsides on power.
The current raise in power tariff has been made under a four-phased plan to gradually cut the energy subsidies, and it is in line with the assurance of Finance Minister Ishaq Dar to the IMF that power tariff for all consumers will be increased. The four-phase plan is expected to reduce the subsidies from about 1.8 percent of GDP to 0.3-0.4 percent of GDP in three years.
The government has already, in August, approved up to 116 percent power tariff hike for commercial and industrial consumers, for the consumers of Azad Jammu and Kashmir and those living in private housing societies. Water and Power Minister Khawaja Muhammad Asif, at a press conference in last week of July, had announced that “commercial, industrial and bulk consumers will witness a hike in power tariff from August 1 while increase in the tariff of domestic consumers would be made from October 1.”
The PML-N, which had made tall claims of making Pakistan an ‘Asian Tiger’, is now setting aside all its promises, saying that harsh monetary policies are a necessity of the time. The government says it has inherited a dilapidated economy and IMF loan was essential to save the country from defaulting.
The current increase in power tariff would trigger a general inflation, besides multiplying the cost of doing business, a finance expert said. It would also affect the productivity of economy and competitiveness of exports and hence deprive the country of the precious foreign exchange earnings, he added.
The power tariff jolt comes ahead of Eidul Azha so it is bound to be even more painful for the already heavily burdened people. The common man and the salaried class would find it even more difficult to manage their home budget.
The step is likely to seriously damage the popularity of the Nawaz government. Different opposition parties and religious groups had rejected the recent price hikes for POL, gas and power, declaring them ‘anti-people’. There have also been public protest demonstrations in different areas of the country over the issue. But the government has so far not accepted the demand to withdraw the prices increase in oil and power sectors.
As the electronic media broke the news of new power tariff increase, people from different walks of life expressed their strong resentment over it terming it another cruel act of the present government. Politicians from different political forces also condemned the increase in power tariff and warned the government of a severe reaction from the public and the parliamentarians in the coming days.