Shehbaz-led govt mulls raising gas, electricity prices to secure new IMF deal

The newly-formed coalition government, led by PML-N president Shehbaz Sharif, is mulling raising gas and electricity prices in order to secure a fresh bailout package from the International Monetary Fund (IMF).

PM Shehbaz has directed the Ministry of Finance to hold talks with the US-based global lender for a fresh tenth review.

Sources said that the repayment of current loans would be a challenge for the new government. 

Sources added that under the fresh review, the ministry will try to take the consensus of the lender on approving a loan of $6-8 billion. 

However, it is expected that the government may have to sign tough conditions with the IMF to secure a fresh deal.

“To overcome the circular debt before approaching the IMF, the government can raise the gas and electricity tariff,” sources added.

A source close to the MoF said that the stable exchange rate can avert the external financial risk of the cash-strapped country.

The source added that the government should focus on economic reforms by fixing a strict policy rate. Additionally, the government must have to take measures to deal with climate change.

Moreover, completion of the previous programme is mandatory before signing a new accord with the Fund. 

Under the current programme, going to be concluded in April, Pakistan would receive $20 million as the last tranche from the global loan lender.