The Federal Cabinet adopted a plan to hike electricity rates and eliminate subsidies before a virtual discussion with the International Monetary Fund (IMF) on the Memorandum of Economic and Financial Policy (MEFP).
In this context, the government also approved the distribution of the updated current debt management plan.
The Washington-based bank’s staff concluded policy-level negotiations last week. Still, the two sides could not achieve a personnel-level deal due to disputes over the necessary fiscal measures. According to a proposal adopted by the government yesterday and submitted to the IMF, the government will raise energy rates by Rs 7.91 per unit through four quarterly revisions: February-March 2023, March-May 2023, and June-May 2023. August, September, through November.
According to the plan, the government will begin charging Rs 3.21 per unit immediately, Rs 0.69 per unit from March to May, and Rs 1.64 per unit from June 2023 to August 2023. The government hiked power prices by Rs 1.98 per unit from September to November.
In June 2023, the base consumer price would increase to Rs 23.39 per unit from Rs 15.28 per unit in June 2022. The government also revealed that exporters would no longer receive a Rs 6,500 crore power subsidy beginning in March 2023.
Beginning in March 2023, the government would get Rs 5,100 crore from the withdrawal of power subsidies for exporters and Rs 1,400 crore from the termination of power subsidies under the Kisan package. To eliminate the export sector’s Rs 12,13 per electric block incentive.
By June 2023, around Rs 250,000 crore will also be collected from electricity consumers. But, according to the publication’s sources, the initiative will impose a premium of Rs 3.39 per unit.
Beginning in June, the seasonally adjusted rise will reach 7,300 billion rubles. This month, power rates would increase by 4.46 rupees due to a quarterly change, according to sources.
 on the Memorandum of Economic and Financial Policy (MEFP).){kind=link}