WEBDESK: The International Monetary Fund (IMF) has approved Pakistan’s request to reduce electricity tariffs by one rupee per unit. This decision comes as a relief for consumers who have been struggling with high energy costs.
To compensate for this reduction, the government will generate revenue by imposing a levy on captive power plants that run on gas. This measure ensures that the decrease in electricity tariffs does not impact Pakistan’s financial stability.
According to official sources, the reduction could lessen the financial burden on consumers by up to Rs100 billion. A household consuming 500 units of electricity would see a monthly saving of Rs500 under the new plan.
The government is also working on a broader relief package for electricity consumers. However, this package is still under review by the IMF. If approved, it could provide further relief to households and businesses facing rising costs.
On Wednesday, Pakistan and the IMF reached a staff-level agreement on the first economic review under the Extended Fund Facility (EFF), securing a $1 billion tranche subject to board approval.
Additionally, a new $1.3 billion arrangement was finalised under the Resilience and Sustainability Facility (RSF), bringing the total financing package to $2.3 billion.
According to the IMF, inflation in Pakistan has reached its lowest point since 2015, and the country’s economic indicators show signs of further improvement.
The IMF’s executive board will approve the EFF’s second tranche of $1 billion and the $1.3 billion RSF new facility either by the end of April or early May, according to Pakistani authorities.
The fund will release $1 billion with the remaining $1.3 billion being given over a period of 28 months, subject to implementing IMF policies.
This approval marks a shift in the IMF’s stance. Previously, the organisation had rejected Pakistan’s proposal to cut sales tax on electricity tariffs, emphasising the need for fiscal discipline. The latest decision indicates a willingness to ease financial pressure on consumers while maintaining economic stability.
Earlier, Prime Minister Shehbaz Sharif had announced on Sunday a package was being prepared under a comprehensive and effective strategy to reduce electricity tariffs, which would be announced soon.
