ISLAMABAD: Pakistan has assured the International Monetary Fund that it will raise electricity and gas prices for consumers, except for protected users, as part of ongoing budget negotiations and energy sector reforms, sources said on Thursday.
Pakistan and the IMF are currently holding talks on the upcoming federal budget, energy sector reforms, reduction of circular debt and future fiscal targets.
Sources said the government informed the IMF that electricity and gas tariffs for non-protected consumers would be increased.
Officials told the IMF that quarterly tariff adjustments approved by National Electric Power Regulatory Authority and monthly fuel charge adjustments would continue to be implemented on time.
The government also assured the IMF that it would continue passing the full impact of global energy prices on to consumers.
According to briefing details, authorities are maintaining a policy of full cost recovery through regular adjustments in fuel, electricity and gas tariffs.
The government said it would continue targeted subsidies for low-income and vulnerable consumers.
Sources said the government was finalizing settlements related to penalty payments involving Independent Power Producers (IPPs). Officials also briefed the IMF on progress toward establishing a competitive electricity market in Pakistan.
Authorities said the reforms were expected to improve efficiency in the power sector and reduce system losses.
Meanwhile, the government has prepared audited data on gas sector circular debt and assured the IMF that it would publicly release gas circular debt figures on a quarterly basis, similar to the power sector.
Officials said work was also underway on a circular debt management plan for the gas sector for fiscal year 2027.
The briefing further stated that an increase in the base electricity tariff from January 2027 would remain fully in effect.
The government also set a target to limit electricity subsidies to a maximum of Rs830 billion in fiscal year 2027, equivalent to 0.6 percent of GDP.
The subsidies will cover power distribution companies, K-Electric, former FATA dues, agricultural tube wells and circular debt payments.
Sources said the government aimed to finalize agreements with IPPs regarding dues and penalties by June 2026. Authorities also plan to limit the increase in circular debt to Rs300 billion during fiscal year 2027.
The government assured the IMF that it would eliminate power sector circular debt completely by fiscal year 2031.
Officials further said the privatization process of Islamabad Electric Supply Company, Gujranwala Electric Power Company and Faisalabad Electric Supply Company would be completed by early 2027.
