IMF refuses to given concession to power consumers

Islamabad: Hopes for relief for electricity consumers in Pakistan have been dashed as negotiations between the International Monetary Fund (IMF), the Ministry of Finance, and the Ministry of Energy have failed to produce any concrete results. The impasse centers on the IMF’s insistence that Pakistan withdraw special concessions provided to industries generating their own electricity.

According to sources within the Ministry of Finance, the IMF has pressed for an immediate increase in gas tariffs for electricity-producing industries starting from July 2023.

These sources also reveal that the IMF has presented a contract with five conditions to both the Ministry of Finance and the Ministry of Energy, with the withdrawal of concessions to power producers being one of the key stipulations.

The IMF’s position emphasizes that gas rates for power producers should be raised immediately, aligning them with other consumer rates. This adjustment should come into effect from July 2023, effectively ending the concessions previously enjoyed by power producers.

In response, the Ministry of Finance has requested additional time to announce any potential relief measures and has asked the IMF for an extended timeline to meet its conditions. The IMF, on the other hand, has urged the Ministry of Finance to reform the power sector’s system to provide relief to consumers.

As negotiations remain at a standstill, the outcome of these talks will significantly impact electricity tariffs and the cost of living for the citizens of Pakistan. The situation underscores the complexities surrounding economic negotiations and their far-reaching consequences.