IMF Blocks Pakistan Electricity Tariff Reduction Plan

The government’s idea to lower electricity tariffs hit a snag because the International Monetary Fund (IMF) isn’t signing off on a staff-level agreement (SLA) for Pakistan’s first biannual review of the $7 billion Extended Fund Facility (EFF), according to Dawn.

Reports suggested the prime minister would announce an Rs8 per unit drop in electricity rates in his March 23 speech, but he didn’t. Instead, he held a meeting about power sector issues.

On March 15, the PM’s office said petroleum prices would stay the same despite a possible Rs13 per liter cut, with the savings meant to help electricity users. They also had a relief package ready, using money saved from lower global oil prices.

But the IMF, which is checking Pakistan’s economy for the first half of this fiscal year and the rest of 2025, didn’t okay the tariff cut. Officials say the IMF found the numbers off during review talks, delaying any decision.

A Rs2 per unit cut was brought up in IMF discussions, and the government thought about raising the petroleum levy to balance the cost. Even though this wouldn’t affect overall revenue, the IMF wants a full look at the financial impact first.

On top of that, the National Electric Power Regulatory Authority (Nepra) is reviewing requests from power companies about yearly tariff changes, adding more complexity.

Sources say that despite the regulatory and process issues, a smaller cut of about Rs5 per unit might still happen if the government can back it up with solid data.