The caretaker government engaged in discussions with the International Monetary Fund (IMF) aiming to secure support for its strategies on tariff adjustments and reducing the accumulation of unpaid bills in the energy sector.
Under the proposed plan, industrial electricity rates will be cut to between 8.5 and 11.75 cents per kWh from the current 14 cents, without increasing subsidies.
To offset this, fixed monthly charges for certain consumer groups will rise from Rs 50 to Rs 450, reducing the need for cross-subsidisation.
Additionally, a plan to address the energy sector’s circular debt, amounting to Rs 1.27 trillion, has been put forth, relying on short-term government financing.
This dialogue was initiated by dedicated teams from the Ministries of Power and Petroleum, led by caretaker Minister Muhammad Ali, in hopes of gaining approval from both the IMF and the caretaker federal cabinet before their term concludes.
The IMF has requested further details from Pakistan, with a promise to provide clarity within the next few days, setting the stage for future discussions.
The World Bank has also been involved in these preliminary talks.
The proposed tariff reforms suggest reducing industrial electricity rates significantly, aiming to balance the costs with a subsidy-neutral approach, while increasing fixed charges for certain consumer categories to offset subsidies.
A recent meeting of the Special Investment Facilitation Council (SIFC) outlined the need for a comprehensive technical paper to address circular debt, aiming for inclusion in the upcoming budget.
However, the SIFC’s Apex Council decided that immediate action was preferable to waiting for the budgetary process.
In a Senate Standing Committee on Power, it was acknowledged that high tariffs are hindering the competitiveness of Pakistani industries. The IMF raised concerns about potential revenue losses from these tariff reforms.
I am fighting against corruption since 1975 and lost a senior class 1 job and have to sell one kanal house in DHA Lahore on penny price while fighting against corruption for sympathy of Pakistan and Futures generations of Pakistan to save economy I have in the year 1997 series of meetings in prime minister House Islamabad and Lahore with Nawaz sharif and Shahbaz sharif Ex prime ministers but they didn’t bother to take any corrosive measures which resulted Pakistan stand destroyed