IMF Ready to Approve Loan if Pakistan Govt Agrees to Increase 50% in Electricity Bills

Newstoday: In three days, discussions between Pakistan and the IMF are expected to come to a close. The lender demands that Pakistan suspend unplanned electricity subsidies and increase power prices by 50%. The government team has been given permission by Prime Minister Shehbaz Sharif to accede to the IMF's demand to increase the power tariff; the lender wants to do so by 50%, but the government is only ready to raise it as higher as 20-33 percent. The Prime minister said his team to show him the results via video conference. The base rate could increase by an average of Rs 7.74 per unit, according to individuals familiar with the discussions, but the hike in the higher level will be substantially more. However, the premier is still hoping that the Power Division may convince the IMF to scale back the suggested increase.

Following the PM's approval, the updated circular debt management plan, which details price increases resulting from quarterly and annual tariff revisions, will now be communicated with the IMF today. Relevantly, it is yet unknown if the PM agreed to the maximal price increase for consumers with higher incomes. Govt could only increase the power tariff by 33 percent, although the IMF demands a 50 percent hike. The IMF delegation will stay in Islamabad until February 9 to continue the negotiations starting on January 31.