ISLAMABAD: The International Monetary Fund (IMF) has called upon Pakistan to raise gas tariffs, signaling a potential increase of up to 41 percent by mid-February. This development comes as part of ongoing discussions between Pakistan and the IMF regarding economic reforms and financial assistance.
Sources have disclosed that the IMF has declined to provide subsidies on power tariffs, with exceptions limited to those already outlined in the budget. Additionally, substantial funding allocations have been earmarked for various sectors. Notably, Rs 1000 billion will be released for the petroleum sector, Rs 250 billion for the power sector, Rs 600 billion for the Oil and Gas Development Company Limited (OGDCL), and Rs 150 billion for the Pakistan Petroleum Limited (PPL).
In a separate initiative, Pakistan has proposed a reduced electricity tariff plan for the export sector, aiming to lower tariffs from 14 cents to 9 cents per unit. This proposal, subject to IMF approval, is intended to enhance the competitiveness of Pakistani exports in global markets.
However, it’s worth mentioning that the IMF had previously rejected similar proposals to lower power tariffs for the export sector. Nevertheless, the export sector has persistently advocated for reduced tariffs to bolster Pakistan’s exports.
The IMF’s latest directives coincide with its downward revision of Pakistan’s growth estimate for fiscal year 2024 to two percent, reflecting a 0.5 percent reduction from previous projections. Despite these adjustments, ongoing discussions between Pakistan and the IMF underscore the importance of implementing structural reforms to address economic challenges and foster sustainable growth.
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