Karachi:
The government assured the International Monetary Fund (IMF) of sweeping economic reforms before the Federal Budget of 2025-26, including fuel increases, electricity and gas prices, officials said.
The government plans to implement a series of budgetary measures since July 1 with the aim of reducing the fiscal deficit and tackling the country’s growing energy sector.
These measures include additional contributions to oil products, a new increase in the debt service for electricity bills and adjustments to gas invoices. Electricity prices will be repeated annually since July 2025, while gas prices are expected to be adjusted twice – first in July 2025 and again in February 2026.
Read more: IMF hits 11 new conditions in Pakistan
Sources have said the federal government is committed to imposing RS5 carbon levy per liter on gasoline and diesel. Provincial governments are not expected to provide subsidies for electricity or gas within the new policy framework.
To cope with the growing circular debt in the energy sector, the government will borrow RS1.25 trillion from commercial banks. The loan will be repaid by electricity consumers over a six -year period through a 10 % increase in energy accounts. The government will maintain the power to increase this increase if required.
The IMF has also been secured for a gradual reduction in electricity subsidies as Pakistan’s targets that bring its circular debt to zero by 2031.
Sources further stated that the National Electricity Regulatory Authority (NEPRA) will continue the quarterly duties adjustments and impose timely fuel cost adjustments. Only targeted subsidies will be provided and the gap between basic invoices and real revenue will be reduced.
Read more: Pakistan identifies six new commercial corridors
The up -to -date circular debt management plan is expected to be approved by the Council of Ministers in July. While the energy sector saw profits of 450 billion Rs in the first half of the current year, total debt levels remain high.
Since January 2025, circular electricity debt had reached 2.44 trillion Rs, while the gas debt was recorded in 2.29 trillion Rs by June 2024.
Efforts to reduce debt burden include ongoing negotiations with independent electricity producers (IPPs), with RS348 billion in payments expected to be cleared by June. Employees say that improved cost recovery will be the key to stabilizing energy prices in the long run.
a href=”https://tribune.com.pk/story/2546518/fuel-power-prices-set-to-rise-as-pakistan-commits-to-imf-conditions”>Source link
