ISLAMABAD: Minister for Finance and Revenue Miftah Ismail on Friday said that the International Monetary Fund (IMF) will release a loan tranche worth $1.17 billion to Pakistan after its board meeting which is scheduled for Monday.
Addressing a press conference here, the minister said that Pakistan had fulfilled all the conditions set by the Fund in order to secure the loan programme and it is very likely that the board will approve the release of tranche on Monday, August 29.
Terming the PM’s visit to Qatar a success, he highlighted that Qatar had agreed to make $3 billion investment in Pakistan’s various sectors. “The $4 billion funding gap which IMF was concerned about has also been bridged as Qatar and Saudi Arabia have assured new investments along with providing Pakistan with oil on deferred payment,” he added.
Similarly, he said UAE had also announced to invest primarily in government’s shares worth $1 billion.
Dispelling rumours related to Qatar’s takeover of major Pakistani airports, Miftah said that there hadn’t been any discussion or agreement of selling Pakistan International Airlines (PIA) or the Roosevelt Hotel to Qatar, and clarified that Qatar was only interested in getting the management control of Pakistan’s big airports.
Further, Miftah informed that Qatar was also interested to invest in large scale solar firms as well as investing in Pakistan’s capital market. “The government intends to install solar power plants with a capacity of 8000 MW, as solar energy will help generate cheaper electricity for consumers”, he added.
Addressing public concerns over extra electricity bills this month, the finance minister said Prime Minister Shehbaz Sharif was worried over the hike in electricity bills therefore, he had formed a committee to deliberate what relief can be given to small consumers using between 200 and 300 units of electricity per month.
He explained that prices had to be increased to fulfill the IMF’s demands, increased demand during peak summer and the subsequent fuel charges adjustment (FCA).
“We had to raise the prices of electricity for all kinds of consumers due to pressure from the fund. Then, in May, electricity demand was on peak due to unprecedented hot weather conditions; the government had to run even the most expensive power plants, which are run on furnace oil which costs around Rs59 per unit. He said that one a furnace oil plant activated in Jamshoro had a variable cost of Rs69 per unit.
“Our anticipated charges were Rs6 per unit but actual charges were around Rs100 because coal became very expensive while gas prices were the highest on record. May was very hot. There was a day when electricity demand rose beyond 30,000 megawatts. We generated 25,000MW which was the maximum we can.”
However, he informed that after detailed discussions, the Power Division has informed the IMF the government would remove FCA on those using less than 200 units whereas the Fund has agreed to the Pakistan’s request in this regard. “The government will lose Rs20-21 billion from this. We have removed FCA on 56% of consumers.”
Informing that that 56% or 17.1 million out of around 30 million electricity consumers would be exempted from the fuel adjustment, Miftah asked consumers who used less than 200 units to not pay the current bills as new ones without FCA charges will be issued soon. However, those who have paid them will have the amount adjusted in their bills for September.
“The PM has formed another committee which will deliberate on giving FCA exemption to those consuming 200 to 300 units of electricity, ” he concluded.
Pakistan 321