IMF okays cut in electricity tariffs

ISLAMABAD: The International Monetary Fund (IMF) has approved a reduction in electricity tariffs by one rupee per unit, providing relief to all consumers.

As per the details, the relief will be funded by revenue from the levy on captive power plants, which were earlier subject to a levy on gas consumption.

The government is also working on an electricity relief package for consumers, which will be announced after the IMF’s approval.

Meanwhile, a new carbon levy will be introduced under the Staff Level Agreement (SLA) between Pakistan and the IMF. Along with the reduction in electricity tariffs, an agreement has also been reached to increase water prices and open up the automobile sector to global trade.

The Prime Minister is expected to announce an average reduction of Rs. 7 per unit in electricity tariffs in the coming days, effective from April 1, 2025. The carbon levy, water price hike and automotive sector reforms are expected to be implemented from July 1, 2025.

It is worth mentioning that under this agreement, Pakistan has accessed $1 billion under the Extended Fund Facility (EFF).

The IMF said in its statement that the inflation rate in Pakistan is the lowest since 2015 and the country’s economic situation has improved with further recovery expected.

The total amount received by Pakistan under this program will reach $2 billion.