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Latest Pakistan

IMF Demands a 50% Increase in Gas Prices

Islamabad: The International Monetary Fund (IMF) has demanded a 50% increase in gas prices after electricity. According to sources, talks were held between Pakistani and IMF officials regarding providing relief to consumers on electricity bills. IMF rejected the proposal of giving relief to consumers using up to 400 units of electricity but has agreed to collect bills from consumers using up to 200 units in installments. Sources say that final approval for collecting bills in installments will be taken from the federal cabinet. This measure can provide temporary relief to almost 4 million electricity consumers, while relief up to 400 units could have benefited 32 million consumers.

Sources say that IMF emphasized cracking down on electricity and gas theft and improving recoveries. In addition, IMF demanded implementation of the conditions of the Standby Program which include cutting expenditures, restructuring of institutions, and bringing 203 state-owned companies under the Ministry of Finance. The Finance Ministry said that IMF wants restructuring of PIA, Steel Mills, RLNG power plants, and DISCOs in the current fiscal year. Meanwhile, a meeting of the Cabinet Committee on Privatisation was held under the chairmanship of Finance Minister Shamshad Akhtar. The meeting decided to form a technical committee to remove obstacles regarding PIA’s privatization and reorganization. The Aviation Division has been directed to present a detailed action plan with a clear timeframe in collaboration with the Privatisation Commission.

Furthermore, the National Electric Power Regulatory Authority (NEPRA) has issued a new average tariff for solar power projects. According to NEPRA, solar power accounts for up to 50% in controlling electricity prices. The power generation cost of IPPs is Rs 78 per unit, the new average tariff for solar power projects has been set at Rs 4.95 per unit. The new tariff has been issued for the financial year 2022-23. The power generation cost of some solar power projects is Rs 1.54 per unit. WAPDA requires Rs 154 billion in revenue for 2022-23.

On the other hand, the World Bank study states that WAPDA has to pay provinces Rs 40 billion as water usage benefits, Rs 15 crore 60 lakh will be paid to IRSA as charges. The capacity payment of solar power projects is zero, power from IPPs is being purchased from solar power projects on a take-on basis. 17 to 18 more dams can be built in Pakistan.