IMF Asks Govt to Increase Energy Prices for Revival of Loan Program

The International Monetary Fund (IMF) has shared its list of prerequisite actions with Pakistan and stated unequivocally that it must implement all demands in order to restart the stalled bailout program.

The lender has instructed Pakistan to take all steps to pave the way for a staff-level agreement and the release of a $1 billion tranche under the Fund’s Extended Fund Facility (EFF), local media reported today.

The IMF has requested a roadmap from Pakistan for the collection of Rs. 855 billion through the Petroleum Development Levy (PDL) until June 30, 2023. According to sources, the government must increase the HSD levy by Rs. 15 to Rs. 50 per litre. The HSD levy is currently Rs. 35 per litre, having been raised by Rs. 2.5 from Rs. 32.5 per litre in the most recent fortnightly review of petroleum prices.

The lender has also asked for the settlement of circular debt in the gas sector as another major prerequisite to the bailout, for which Pakistan will have to raise gas prices by up to 74 percent. Finance Minister Ishaq Dar is reportedly concerned over the IMF’s fresh demands and may seek some clarity in the coming days.

Given Pakistan’s worsening economic situation, experts recommend that finding common ground for releasing the IMF bailout is the only viable route to get out of trouble.



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