A crucial phase of negotiations is underway between the government of Pakistan and the International Monetary Fund (IMF)mission to secure the second tranche of over $1 billion under the $7 billion bailout package.
According to sources, the IMF mission has held discussions with the Power Division on electricity tariff rebasing. Meanwhile, the IMF has reportedly given a green signal to the government’s plan to reduce electricity tariffs.
The IMF has directed the National Electric Power Regulatory Authority (Nepra) and the Power Division to take a decision in consultation.
The government has placed a plan to reduce electricity tariffs before the IMF from April, under which the basic tariff is proposed to be reduced by up to Rs 2 per unit.
According to sources, the electricity rate per unit may be reduced by Rs 1 to 2 from April or May.
The government has also shared its plan for privatization of distribution companies (DSCOs) with the IMF mission.
The IMF has expressed concern over the non-privatization of two DISCOs by January and has also expressed displeasure over the poor performance.
The IMF is of the view that improvement in the power sector is not possible without improving the performance of DISCOs.
According to sources, important talks are also scheduled with the IMF delegation on the circular debt of the power sector today, while discussions are also expected today on the FBR’s revenue policy, agricultural income tax, tax on the property sector and the Sovereign Wealth Fund.
