ISLAMABAD - The Pakistan Muslim League Nawaz (PML-N) government is all set to give an electric shock to the helpless masses by increasing power tariff of up to Rs5 per unit as it committed with the International Monetary Fund (IMF).

Sources say that the government has decided to increase the power tariff for industrial and commercial consumers by Rs5 per unit from the ongoing month of July. Later, it would raise the tariff for domestic consumers by Rs3 per unit. Prime Minister Muhammad Nawaz Sharif will give final approval on the hike.

Pakistan has made a commitment with the IMF for taking several measures including increase in power tariff, interest rate, broadening of tax-net to get the $5.3 billion bailout package.

The government would give subsidy to the consumers using electricity up to 300 units per month. Pakistan and IMF has recently agreed to increase power tariff to eliminate subsidy in exchange of debt under the extended fund facility from IMF's Executive Board. 

The fund asked the government to withdraw power subsidy otherwise budget deficit would be difficult to control.  The government had provided subsidy of Rs1.5 trillion to the power sector but failed to overcome the ongoing electricity shortage.

The IMF has reportedly asked the government to give targeted subsidies as the existing electricity tariff is providing benefit to the 85 percent rich and only 15 percent to the poor. 

The fund also said that programme also include a comprehensive strategy for tackling the country's long standing energy problems through measures to address the 'circular debt' accumulated in the sector, tariff rationalisation, and promotion of investment in energy generation and modernisation. Such steps would help mitigate power outages, improve the fiscal balance and boost growth.