Islamabad: The federal government has started planning to reduce the current electricity prices through various proposals and measures.
According to the report, acknowledging that the power sector faces a significant threat to financial stability, the government is devising plans to rationalize electricity tariffs through various proposals. This includes reducing the allocation of the development budget at both the federal and provincial levels.
The government is also working on shutting down domestic Independent Power Producers (IPPs) from both the public and private sectors. However, the IMF has not yet endorsed the power rationalization plan.
Amid ongoing inflation, yet another electricity price hike has been imposed on the public.
Sources indicate that there is some resistance within government ranks, as some key circles believe that the plan might not be feasible and could fail to provide a permanent solution to the structural issues faced by the loss-making power sector.
Senior government sources have revealed that non-CPEC IPPs will be targeted through various mechanisms for the payment of capacity charges.
According to sources, the government aims to create significant fiscal space by cutting the Public Sector Development Program (PSDP) at the federal level and the Annual Development Plans (ADPs) of provincial governments, in order to generate the necessary financial resources.
