As part of efforts to decrease unsustainable public debt in the electricity and gas industry, Prime Minister Shehbaz Sharif announced on Monday that the government has hiked power tariffs again under an International Monetary Fund arrangement.

Poor people would not feel the effects of the price increases of up to Rs5.75 ($0.020) a unit, he said. Up to 63% of the market, made up of buyers of up to 200 units, would be protected from the tariff rise.
Additionally, he stated that roughly 31% of the total domestic consumers (those using less than 300 units per month) were receiving a partial subsidy.
After witnessing the signing of a framework agreement between State Oil company of Azerbaijan Republic (SOCAR) and Pakistan LNG Limited (PLL), the prime minister stated, “We had to increase electricity prices because of the IMF deal.”
He remarked, “The government had to raise electricity prices because of the toughest conditions from the International Monetary Fund (IMF), but I emphasized that the burden should not be passed on to the protected segments of the society.”
The lender had warned that the power sector was experiencing severe liquidity problems due to mounting debts and regular disruptions.
A compromise was finally achieved between the IMF and Islamabad last month after eight months of negotiations. The arrears are a sort of public debt that accumulates due to subsidies and unpaid bills. The government owes over Rs1.6 trillion ($5.56 billion) to the gas sector in addition to its nearly Rs2.6 trillion ($9.04 billion) in debts to power generation businesses, according to official estimates.
The prime minister described the situation as “a gaping hole,” and said, “We have to deal with this on a war footing.”
He emphasized that electricity theft is a major problem that must be solved.
Increase in Electricity Rates
SOCAR Trading has offered to supply Pakistan with liquefied natural gas (LNG) at a rate of one cargo per month under the provisions of the framework agreement, with payment terms that are flexible and credit lines that extend for 30 days after the delivery of the cargo.
The prime minister remarked that “we are standing here as brothers from two brotherly countries Pakistan and Azerbaijan,” making the event a particularly joyous occasion.
Shehbaz, speaking at the Ombre Special Economic Zone, Sundar Green Special Economic Zone, and Smart Special Economic Zone soft launches in Sheikhupura, emphasized the need for the industrial sector to adopt cutting-edge technology and renewable energy sources in order to increase export competitiveness.
In light of rising oil prices, the prime minister has stated that utilizing the potential of solar, wind, and hydel energy to produce locally is the only viable choice.
He stated that the problem of circular debt, which was growing due to the waste of billions of rupees annually due to line and transmission losses and power theft, needed to be handled on a war footing.
The prime minister praised the private sector for coming up with a strategy to create the three SEZs and pledged his government’s full support, as did the governments of India’s federal government and the state of Punjab.
He praised the private sector for its efforts to lure billions of rupees in investment, as well as its plans to construct a three-megawatt solar power plant and other ancillary facilities, such as a vocational training facility.