The International Monetary Fund (IMF) has demanded a further increase in electricity prices, citing an additional burden of Rs 150 billion on the power sector.
According to sources, the IMF has asked the Ministry of Energy to increase the electricity tariff by Rs5 to Rs7 per unit in July. The IMF expressed concern over failing to meet targets, as the power sector’s circular debt is expected to reach Rs 2500 billion by the end of the current financial year. The Ministry of Energy has struggled to control this debt.
The IMF also requested a plan from the Ministry of Energy to increase power and gas tariffs in the next financial year. Currently, IMF representatives are discussing this issue with Ministry officials.
The power sector’s circular debt was supposed to be controlled at Rs 2310 billion by the end of the current financial year. However, it will exceed the target by Rs 150 billion until June. The IMF has warned that circular debt will continue to rise without urgent measures.
Earlier, the IMF demanded Pakistan implement an 18 percent General Sales Tax (GST) on petrol. The IMF asked Pakistan to end sales tax relaxation on all items, including petrol. The government should also apply sales tax on petroleum products along with a Rs 60 levy to increase tax income.
Previously, the IMF recommended an 18 percent GST on food, medicine, petroleum products, and stationery. It also suggested bringing several dozen items, such as unprocessed food, stationery, medicine, and POL products, under the standard rate of 18% GST.
