The International Monetary Fund (IMF) has urged Pakistani authorities to ensure that proposed changes to electricity tariffs do not disproportionately affect middle- and lower-income households, Reuters reported, as talks continue over energy-sector reforms tied to a major IMF financing program.
The discussions are part of Pakistan’s review of electricity prices under its $7 billion Extended Fund Facility (EFF) with the IMF, aimed at addressing long-standing structural issues in the economy and tightening balance-of-payments pressures.
Analysts say the planned tariff revisions are meant to reduce subsidies and ease the financial burden on industry, but could trigger higher inflation and lead to significantly higher electricity costs for households. According to market experts, electricity bills for typical residential users could rise sharply if fixed charges and other cost adjustments are approved.
Electricity prices have been a politically sensitive issue in Pakistan, as they form a major component of the consumer price index and directly affect the cost of living. While inflation has significantly slowed from its near-40 percent peak in 2023, there are concerns that further tariff increases could add upward pressure on prices.
The IMF noted improvements in tackling circular debt in the power sector through better revenue recovery and loss management, but emphasized that tariff adjustments, a condition of the EFF, should be designed carefully to protect vulnerable consumers.