Islamabad: The Cabinet’s Economic Coordination Committee (ECC) recently approved a cumulative bailout package worth PKR 300 billion for the power sector, according to a news report. This package will help the sector deal with its immediate liabilities and offer compensation for the foreign exchange losses incurred by oil marketing companies (OMCs).
According to this package, PKR 200 billion — Islamic Sukkuk
originally raised for retirement of stock of the circular debt — will now be
used to accommodate the immediate cash shortfall. This cash shortfall resulted
from deferring fuel price adjustment and quarterly tariff adjustments.
The ECC approved this deferment on consumer bills till June, according to Prime Minister Imran Khan’s instructions. According to the information available, the deferment would cost approximately PKR 61 billion until May 2020 and the delay in recovery of quarterly tariff adjustments in electricity bills would cost PKR 77 billion. Another PKR 60 billion will be used to pay fuel suppliers and banks, and retire debts.
According to estimates, power companies will face losses of around 10 billion electricity units until June, but capacity payments will become due to power plants. To handle this dilemma, the sector requested the ECC to provide PKR 67 billion, in three equal instalments, out of the Prime Minister’s Emergency Fund.
