The government has prepared a plan to control circular debt: Photo: File
Islamabad: The federal government has confirmed an increase in electricity and gas rates to the International Monetary Fund (IMF). According to sources, the IMF has demanded an increase in gas prices on a six-monthly basis from June 2024 and also called for measures to prevent electricity theft and improve the transmission system. The IMF has stated that the notification for the annual electricity tariff reassessment should be timely in 2023-2024, and there should also be a review of power purchase agreements and reforms in the subsidy for agricultural tube wells.
By January 2024, the circular debt in the gas sector remained at Rs. 2083 billion. The IMF has demanded full recovery of gas prices from all fertilizer companies. The government has ensured a reduction in price differences in gas prices for different regions and industries and has prepared a plan for complete cost recovery from consumers to control circular debt.
The circular debt in the electricity sector is more than Rs. 2600 billion. The government has prepared a project plan for reforms in the financial year 2023-2024 to reduce the circular debt or maintain the stock. The IMF has emphasized on achieving the target of Rs. 2300 billion in circular debt in the electricity sector by June. The government has ensured the establishment of uniform gas prices for cost recovery. The IMF has stated that protection of low-income households should be ensured during adjustments to electricity and gas tariffs.