The government plans to collect an additional Rs721 billion from electricity consumers during the current financial year.
The International Monetary Fund has been informed of the plan to increase the tariff and reduce the circular debt.
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According to sources in the Finance Ministry, electricity price will be hiked by Rs1.25 per unit until September, and Rs39 billion in revenue is expected to be collected from this increase in terms of quarterly adjustment.
From September to December, electricity tariff is likely to be hiked further by Rs4.37 per unit under fuel adjustment charges.
Hiking the electricity rate under fuel adjustment till December will generate Rs122 billion.
Moreover, Rs560 billion is likely to be generated by raising the power tariff Rs5.75 under annual rebasing.
The revenue generated will be used to reduce the circular debt of the energy sector.
By the end of the current financial year, the circular debt of the power sector will be limited to Rs2,130 billion.
By June 2023, the circular debt had reached Rs2,700 billion.
