Reviewing agreements with IPPs to avoid exorbitant payments: Omar Ayub

ISLAMABAD: Industries will get power at half the tariff from now on which will save them about Rs21 billion collectively in production costs, ensuring an impetus for industrial growth and job creation, federal energy minister Omar Ayub said Tuesday.

Present today in ARY News program Power Play, the federal minister, expanding on Prime Minister’s package announced earlier today, said the bracket to benefit the most from industrial relief package is of small industrialists.

Omar Ayub said it is the small industries that create more frequent jobs.

On the circular debt issue, the minister said the liability has soared to Rs22 trillion and said the COVID-19 situation was partly responsible as payments were halted due to uncertainty.

He however blamed previous governments for the kind of agreements they had bound the power sector with, due to which exorbitant expenditure is incurred. He said 87 percent of the payments are due to the fuel consumed in power generation.

READ: PM Imran rolls out power relief package for industries

The energy minister said they were reviewing their agreements with the Independent Power Producers (IPPs) to see possibilities of cutting unnecessarily inflated rates and payables. He said the previous government bought energy at overpriced rates from the IPPs.

Moreover, on the power production, he said earlier it was unavoidable to charge peak-hour rate in order to meet the energy demand, which the PM said will not be charged anymore.