The International Monetary Fund (IMF) has approved a reduction in electricity prices for Pakistani consumers, according to sources close to the negotiations. The National Electric Power Regulatory Authority (NEPRA) and the Ministry of Energy have been granted authority to implement these changes after consulting with relevant stakeholders.
Sources said that electricity tariffs could decrease by Rs. 1 to Rs. 2 per unit, bringing much-needed relief to consumers. The final decision on the exact reduction is expected to be announced next month.
Despite this positive development, the IMF has raised significant concerns about the underperformance of electricity distribution companies (DISCOs). The Fund emphasized that comprehensive improvement in Pakistan’s power sector remains impossible without addressing the fundamental inefficiencies plaguing these distribution companies.
During recent discussions with the IMF, Pakistani officials presented a detailed privatization roadmap for several DISCOs. The first phase targets IESCO, FESCO, and GEPCO, with implementation scheduled by November 2025. Sources revealed that before proceeding with privatization, authorities will clarify the regulatory framework, tariff structure, and balance sheets of these companies.
The plan includes completing 17 preliminary measures for the DISCOs prior to privatization. A second phase will focus on privatizing MEPCO, LESCO, and HESCO. The IMF has cautioned that failure to privatize these distribution companies would render the power sector’s performance unsustainable in the long term.
Additionally, the Fund expressed concerns regarding violations of amendments to the NEPRA Act, highlighting the need for stronger regulatory compliance.
Beyond power sector reforms, the IMF and World Bank delegations have conducted sessions on agricultural income tax. Sources suggest that another IMF delegation may visit Pakistan after Eid to discuss governance issues.
Today’s scheduled talks will focus on the Federal Board of Revenue (FBR), agricultural income tax, and property sector taxation. Critical negotiations regarding the Sovereign Wealth Fund and strategies to control circular debt are also on the agenda.
