IMF accepts govt proposal to make electricity cheaper

Islamabad: The International Monetary Fund (IMF) has accepted the government’s proposal to reduce electricity prices.

It should be noted that the important negotiations between the economic team and the IMF delegation to obtain the second tranche of more than $1 billion under the $7 billion Extended Fund Facility loan program have entered the final stages.

In the very important negotiations with the IMF delegation, tariff rebasing was discussed with the Ministry of Energy officials.

According to media reports, the IMF has given the green signal to the NEPRA and the Ministry of Energy to decide with consultation on the reduction in electricity prices. NEPRA and Ministry of Energy officials shared with the IMF a plan to reduce the basic rates by a maximum of Rs2 per unit from April or May.

It is also reported that from April or May, electricity can be reduced by one to two rupees per unit, and the final decision on this will be made next month.

The plan for the privatization of discos was also shared with the IMF by the authorities. The delegation expressed serious concern over the non-privatization of 2 discos by January and their poor performance. According to reports, the delegation says that complete improvement in the power sector cannot be brought about without improving the performance of discos.

The media reports suggest that the IMF’s proposal to amend the NEPRA Act was also opposed. The delegation also opposed the amendment to the NEPRA Act by the Ministry of Energy. The Ministry of Energy had proposed an amendment to the NEPRA Act.

Important talks on the circular debt of the power sector with the IMF delegation will be held today. Negotiations will be held with the delegation on FBR revenue, agricultural income tax, property tax, and the Sovereign Wealth Fund.

According to reports, another IMF delegation may come to Pakistan after Eid for talks on governance.