No Relief in Electricity Prices in Future as IMF Imposes Strict Conditions

Electricity costs are a big deal for the public, and prices are increasing gradually. The hope for a reduction in unit rates in the future comes to an end, as the IMF imposes strict conditions aimed to get loan in the future.

After giving Pakistan the first part of a $1 billion loan, the strict conditions from the International Monetary Fund (IMF) have been revealed, with major effects on improving the economy, as reported by famous media news channels.

Sources in the Ministry of Finance said that the formula for the National Finance Commission (NFC) award will be reviewed, and the IMF will keep a close watch on how the provincial governments spend money.

The government is also making changes to lower electricity prices and introducing a full package for the energy sector. The power purchase agreements in the energy sector will also be reviewed.

Moreover, the IMF has stopped the government from offering relief in electricity prices in the future, as was done by the Punjab government before.

Sources also said that, under the new terms, the IMF has limited the government’s ability to set support prices for food grains and will also reduce the size of the federal government.

The Ministry of Finance shared that subsidies to the energy sector will be limited to 1% of the GDP, and no extra grants will be given during the IMF program.

Tax changes are another important condition, with plans to bring the agricultural, property, and retail sectors into the tax system.

It’s important to note that the IMF’s Executive Board approved a $7 billion bailout package for Pakistan. The loan program will last 37 months, with the first payment expected by September 30, easing the pressure on external payments.

It is important to note that, temporary relief from Punjab Government will end on 30 September and the tariff rate will increase from 1st October 2024. Check more details about New Electricity rates from October 1st.