Pakistan Assures IMF of Continued Electricity and Gas Price Hikes
The Pakistani government has formally assured the International Monetary Fund (IMF) that it will continue to pass the full impact of global energy prices onto consumers through regular adjustments in electricity and gas tariffs. This commitment was made during ongoing budget negotiations linked to the next phase of Pakistan's bailout program. While protected consumer categories will remain exempt, all other users will face increased costs under a full cost recovery model. The government pledged to maintain quarterly electricity tariff adjustments and monthly fuel charge updates without delay. Additionally, authorities set a subsidy ceiling of Rs. 830 billion for fiscal year 2027, approximately 0.6 percent of GDP, covering distribution companies and circular debt obligations. The plan includes limiting annual circular debt growth to Rs. 300 billion and finalizing agreements with Independent Power Producers by June 2026. Furthermore, the government aims to privatize major power distribution entities, including IESCO and GEPCO, by early 2027, while committing to quarterly public disclosure of gas sector circular debt data to enhance transparency and meet fiscal targets.
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