The International Monetary Fund (IMF) has requested Pakistan to increase gas prices every six months starting in June.
According to documents obtained, the government has agreed to this demand and assured the IMF of timely hikes in electricity and gas tariffs as part of their agreement.
A plan for full cost recovery from consumers fully covers the costs, addressing the significant circular debt in the gas sector, which reached Rs2,083 billion as of January.
Additionally, the government has guaranteed to implement reforms to decrease the circular debt or maintain stocks in the fiscal year 2024-25.
The circular debt in the power sector is still over Rs2,600 billion, and the IMF has also demanded actions to stop electricity theft and improve the transmission system.
The IMF also asked for issuing an annual notification for resetting electricity tariffs in the fiscal year 2024-25. The measures demanded revising power purchase agreements and reforming subsidies for agricultural tube wells.
The IMF aims to meet the target of reducing the power sector’s circular debt to Rs2,300 billion by June. The government has taken steps to ensure uniform gas prices for cost recovery across regions and industries, minimizing differences to improve operations and efficiency.
The circular debt in the gas sector was Rs2,083 billion by June, and the IMF calls for all fertilizer companies to charge the full price for gas, promoting transparency and accountability.
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The government has committed to reducing inconsistency in gas prices among regions and industries. However, it stresses the importance of shielding vulnerable households from the impact of tariff adjustments.
Measures will be taken to safeguard the interests of low-income families during the implementation of revisions to electricity and gas tariffs.