• Login
  • Home
  • Pakistan
  • International News
  • Business
  • Sports
  • Entertainment
  • Opinion
No Result
View All Result
  • Home
  • Pakistan
  • International News
  • Business
  • Sports
  • Entertainment
  • Opinion
No Result
View All Result
Times of Pakistan
No Result
View All Result
Home Pakistan National

Govt Assures IMF of More Tariff Adjustments

ToP by ToP
July 3, 2015
in National
0
0
SHARES
1
VIEWS
Share on FacebookShare on Twitter

With nearly half of Rs145 billion taxes on natural gas lost to court cases, the government has assured the International Monetary Fund (IMF) to make more power tariff adjustments if surcharges imposed recently were struck down by the Supreme Court of Pakistan.

[contentblock id=1 img=adsense.png]

Govt assures IMF
Govt assures IMF of more tariff adjustments

“To protect against a potential negative outcome of legal challenges to electricity surcharges, our strategy would be to take mitigating measures including tariff adjustments, and, if required, suitable amendments to the National Electric Power Regulatory Authority (Nepra) Act that are in line with international best practices and preserve Nepra’s independence,” said Finance Minister Ishaq Dar in a written commitment submitted to the IMF. He went on to add that “in any case, we stand ready to take compensatory measures as needed, including adjustment on revenue side to reach our fiscal target”. The government has explained to the IMF that only Rs75bn out of Rs145bn revenue target from Gas Infrastructure Development Cess (GIDC) had been recovered during fiscal year ending June 30, 2015 because of legal challenges in various courts. Development funds were tightened to offset GIDC shortfall and other revenues slippages. Documents made public by the IMF put the stock of power sector payables at Rs615bn at end-March 2015. These comprise the circular debt of Rs280bn payable towards power sector entities and the stock of Rs335bn arrears covered by the Power Sector Holding Company Limited (PHCL). 

[contentblock id=2 img=gcb.png]

The build-up of arrears was due to significant non-recoveries related to government and private consumers, accrued interest on PHCL debt, line losses that are not recognised in the tariff, delays in the refund of excess GST collected by the FBR, late payment surcharges, and delays in tariff determinations. The authorities plan to reduce the accumulation of payables. This includes steps to improve collections and reduce operating costs and losses. The accumulation of payables would be reduced from an estimated Rs175bn in fiscal year 2014-15 to Rs113bn this year, with a view towards further halving new arrears accumulation by 2018-19. To achieve this, capital expenditures and revenue-based load management would reduce losses and improve collections. Overall losses are expected to decline by 0.5 per cent and collections are expected to improve by 2pc per year. Taking advantage of the room created by low oil prices, late payment surcharges and higher system losses were incorporated into fiscal year 2014-15 determined tariffs.

[contentblock id=3 img=adsense.png]

This is expected to arrest a portion of the build-up of the circular debt and improve the cash-flow of the system. The government will continue to work with some regional (provincial) and local governments to prevent further accumulation of arrears. In addition, the stock of arrears is expected to be significantly reduced over the next three years, supported by privatisation and limited budgetary support. The stock of PHCL debt will be transferred back to distribution companies (Discos), which will be privatised. This will help to reduce the stock and ease the servicing of PHCL debt. In the meantime, a surcharge will be levied to service the PHCL debt. The authorities have allocated about 0.1pc of GDP of budgetary resources to clear part of the stock of arrears that accrued with respect to provincial and local governments. The IMF said there were significant downside risks to the plan. In particular, delays in the privatisation programme and court challenges to the surcharges would set back the programme and increase the flow of payables. On the upside, the government can step up its efforts to further reduce transmission and distribution losses and increase collections.

Tags: Govt Assures IMFlatest newspakistan newspakistan timesTariff Adjustments
Previous Post

Geo-Strategic Significance of Pakistan’s Port of Gwadar

Next Post

19 Die As Train Carrying Army Men Falls Into Canal Near Gujranwala

ToP

ToP

Related Posts

Imran Khan says world should give Taliban 'time'
National

Imran Khan seeks pre-arrest bail in terrorism case

by Jameel Ahmad
August 22, 2022
Imran Khan
National

Supreme Court bars govt from initiating action against Imran Khan

by Shameel Shoaeb
May 26, 2022
FM calls upon OIC states to act as “reliable partners, not an accomplice in aggression”
National

FM calls upon OIC states to act as “reliable partners, not an accomplice in aggression”

by Jameel Ahmad
March 22, 2022
OIC, Islamic Development Bank sign charter of Humanitarian Trust Fund for Afghanistan
National

OIC, Islamic Development Bank sign charter of Humanitarian Trust Fund for Afghanistan

by Jameel Ahmad
March 22, 2022
J10-C Induction: PM says armed Forces Fully Capable to Thwart Aggression
National

J10-C Induction: PM says armed Forces Fully Capable to Thwart Aggression

by Jameel Ahmad
March 14, 2022
Imran Khan
National

Opposition’s Haste for no Trust Move to Save Looted Wealth: PM Imran

by Jameel Ahmad
February 18, 2022
Lynched Sri Lankan national’s wife receives aid from Sialkot business community
National

Lynched Sri Lankan national’s wife receives aid from Sialkot business community

by Jameel Ahmad
January 18, 2022
Next Post
19 die as train carrying

19 Die As Train Carrying Army Men Falls Into Canal Near Gujranwala

Popular Stories

  • Axact Scandal BOL

    Axact Pakistan Offering Fake Diplomas To Earn Millions

    0 shares
    Share 0 Tweet 0
  • Imran Khan Dials Down Anger, says ready to Mend Fences

    0 shares
    Share 0 Tweet 0
  • Get a Made to Measure Suit in 4 Days through André Emilio!

    0 shares
    Share 0 Tweet 0
  • 10 Most Expensive Pets, Unusual Choices

    0 shares
    Share 0 Tweet 0
  • Govt’s Subsidy Plan Raises Red Flags

    0 shares
    Share 0 Tweet 0
Times of Pakistan

About Times Of Pakistan

kralbetbetturkeyikimislibahis1xbetm.infohipas.infohttps://www.wiibet.com/restbetcdn.com

Other Categories

  • Beautiful Pakistan
  • Fashion News
  • Funny News
  • Viral Videos
  • Weird News

Recent Posts

  • Govt’s Subsidy Plan Raises Red Flags
  • Imran Khan Dials Down Anger, says ready to Mend Fences
  • Standoff at Imran Zaman Park residence enters second day as skirmishes resume

Times Of Pakistan © 2021. Design & Developed by E2E Solution Providers.

No Result
View All Result
  • Home
  • Pakistan
  • International News
  • Business
  • Sports
  • Entertainment
  • Opinion

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In