Pakistan-IMF to start virtual talks today

Pakistan-IMF will start virtual talks today, Feb 13.

A team from IMF concluded policy-level talks last week, however, the two sides could not strike a deal due to differences over fiscal measures that needed to be taken before the staff-level agreement. 

Ahead of the virtual talks with the International Monetary Fund (IMF) on the Memorandum of Economic and Financial Policies (MEFP), the federal cabinet on Sunday approved a plan to increase the power tariff and end subsidies.

As reported, the federal cabinet has also approved a revised circular debt management plan through circulation in this regard.

As reported, as per the plan okayed by the federal cabinet, the government will increase power prices by Rs7.91 per unit in four quarterly adjustments for February-March 2023, March-May 2023, June-August and September-November.

Under the plan, the government will also charge Rs3.21 per unit from now onwards, Rs0.69 from March-May and increase it again by Rs1.64 per unit from June onwards to August of 2023. From September-November, the government will hike the power tariff by Rs1.98 per unit.

As reported, the consumer base tariff will be increased from Rs15.28 per unit in June 2022 to Rs23.39 per unit till June 2023.

The government also approved to end electricity subsidy of Rs65 billion given to exporters, with effect from March 2023.

With this plan, the government aims to get Rs51 billion from the withdrawal of subsidies on electricity for exporters. While Rs14 billion will be collected by ending the subsidy on electricity under the Kissan Package from March 2023.

Meanwhile, for the export sector, the Rs12.13 per unit subsidy on electricity will be taken back.

About Rs250 billion will also be recovered from electricity consumers by June 2023. Under the plan, a surcharge of Rs3.39 per unit will be levied, the news sources quote.

Rs73 billion will be acquired from the increase in quarterly adjustments till June. In the quarterly adjustment, electricity will become more expensive by up to Rs4.46 this month, the sources added.