IMF Asks Pakistan to Increase Electricity Price by Rs. 5 Per Unit Before July 10

July 4, 2024Zayn0

Increases in the price of gas and electricity have been mandated by the International Monetary Fund as a prerequisite for a new initiative with Pakistan. To qualify for the new IMF program entails raising the power tariff rate by Rs. 5 per unit on any previous action taken before July 10, 2024.

The rationale behind the tariff hike is rooted in the IMF’s need for Pakistan to guarantee the implementation of specific economic reforms and measures to be eligible for the new program. It has been determined to take these actions to strengthen the nation’s declining financial and budgetary positions during the past few years.

Ongoing Negotiations with the IMF

“Sources” stated that since the government has already incorporated all of the lender’s requirements into the current year’s budget, Islamabad has also requested that the IMF liberalize extra funds for the upcoming program. Under the new program, the country is requesting $8–10 billion, but the IMF is only willing to offer $6–7 billion at this time.

The aforementioned discrepancy in the distribution of funds could be a topic of current discussions between the IMF and the Pakistani government. In an ideal world, the government would oversee a larger financial package to help the nation emerge from its current economic crisis and promote economic growth.

Meeting IMF Requirements in the Past 

It is important to note that Pakistan has already included all of the IMF’s requirements in the budget for this year. The lender has acknowledged this and expressed satisfaction with the country’s parliament’s approval.

The IMF has deemed the ECC’s decision to raise the gas tariffs for captive power plants appropriate, despite the ECC’s decision to maintain the same gas pricing for residential customers.

In Summary 

If Pakistan is to receive a new program from the lender, the IMF has insisted that the energy cost increase by Rs 5 per unit. The government will need to carefully weigh the economic and social effects of this hike to lessen the negative effects it will have on the lives of its citizens while negotiating for a larger IMF loan package.

 

 

Zayn

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