Islamabad: The federal government has decided to increase the cost of electricity by accepting another condition of the International Monetary Fund (IMF).
According to the sources, there were talks between Pakistan and the IMF on the energy sector, in which the government also gave the revised circular debt management plan to the IMF.
The price of electricity will increase by Rs 3 per unit next month and will be increased by 70 paise per unit in May, while electricity will be expensive by Rs 6 per unit till the first month of the new financial year.
The IMF has also called for scrapping the subsidy proposal up to 300 units and said that only up to 100 units should be provided to poor consumers. 200 billion rupees revenue will be obtained by increasing the price of electricity
The IMF has also demanded to cancel the revolving debt of 4100 billion rupees, 952 billion rupees will be adjusted in the revolving debt while the subsidy of 675 billion rupees to the consumers will also end.
The revolving debt in the electricity sector is 2500 billion rupees, while the revolving debt of the gas sector has reached 1600 billion.
Earlier, talks between Pakistan and International Monetary Fund (IMF) kicked off on Tuesday to strike a staff-level agreement on the ninth review under the $7 billion Extended Fund Facility (EFF).
Finance Minister Ishaq Dar is leading the Pakistani side while IMF’s review mission is headed by Nathen Porter as the cash-strapped nation launches renewed efforts to complete the pending ninth review.
The IMF’s review mission had arrived in Islamabad on Monday.
A local newspaper had reported that the government is expected to share its plan with the visiting review mission for taking additional taxation measures.
Analysts have termed the technical level talks “toughest” as the Fund has refused to give any leniency in its conditions set for the revival of the loan facility.
Pakistan is gripped by a major economic crisis, with the rupee plummeting, inflation soaring and energy in short supply. Prime Minister Shehbaz Sharif for months held out against the tax rises and subsidy slashing demanded by the IMF, fearful of backlash ahead of elections due in October.
