The International Monetary Fund (IMF) has approved a reduction in electricity tariffs for all consumers in Pakistan. The government can now cut tariffs by Rs1 per kilowatt-hour, providing relief to consumers. This decision comes after the recent staff-level agreement between Pakistan and the IMF.
The reduction is expected to ease the financial burden on consumers by up to Rs100 billion. A household using 500 units of electricity could save Rs500 monthly under the new plan. This relief will be funded through a levy on natural gas used by captive power plants, as outlined by the IMF.
This move is part of a broader effort by the government to provide financial relief to electricity users. The IMF noted that this decision aligns with ongoing reforms in Pakistan’s energy sector. Officials hope the tariff cut will positively impact household budgets, especially in the current economic climate.
The IMF’s approval follows Pakistan’s recent staff-level agreement with the fund, unlocking $1 billion under the Extended Fund Facility (EFF). While inflation has decreased in Pakistan, the IMF’s board will approve additional funding after meeting key conditions, including the carbon levy.