Pakistan has assured the International Monetary Fund (IMF) that it will continue implementing energy price adjustments under its reform program. The policy will ensure that global energy price changes are reflected in domestic tariffs.
Officials confirmed that Pakistan will keep passing the impact of international oil, electricity, and gas prices to consumers. This will be done through regular tariff updates in the energy sector.
The assurance was given during ongoing budget talks between Pakistan and the IMF. These discussions focus on energy reforms, fiscal discipline, and control of circular debt.
Authorities stated that electricity and gas prices will continue to change for most consumers. However, protected users will remain exempt from these increases. This is part of the government’s revised pricing structure.
Pakistan has also committed to maintaining a full cost recovery model. Under this system, global energy price changes are directly transferred to local fuel and utility rates.
Officials informed the IMF that electricity subsidies will be capped at Rs. 830 billion for the next fiscal year. This amount equals around 0.6 percent of GDP. The subsidies will support distribution companies and other sector needs.
The government also confirmed that quarterly electricity tariff adjustments and monthly fuel cost adjustments will continue without delay. These measures are part of the IMF program conditions.
During the talks, Pakistan shared updates on resolving financial issues in the power sector. This includes agreements with Independent Power Producers regarding arrears and penalties. These agreements are expected to be finalized by June 2026.
Authorities also reported progress in managing gas sector circular debt. Audited data has been prepared and will now be published every quarter. This improves transparency in the system.
Pakistan has set a target to limit annual circular debt growth to Rs. 300 billion by FY2027. This is part of broader financial reforms under the IMF program.
Officials also briefed the IMF on plans to privatize major electricity distribution companies, including IESCO, GEPCO, and FESCO. The privatization process is expected to be completed by early 2027.
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These steps show that Pakistan is continuing its efforts to stabilize the energy sector. The government aims to improve financial discipline and meet all IMF program requirements.
