Govt withdraws power subsidy for $7 billion bailout programme

Power subsidy emerged as another obstacle in the most anticipated $7 billion loan from the International Monetary Fund (IMF), forcing the government to withdraw relief for the consumers of Islamabad.

The subsidy was provided to Punjab after Pakistan Muslim League-Nawaz (PML-N) Supremo Nawaz Sharif had announced to reduce electricity prices by Rs14 per unit for August and September.

In a recent development, a notification issued by the Islamabad Electric Supply Company (IESC) stated that power consumers of the federal capital would pay their electricity bill in accordance with regular charges.

Punjab’s information minister Azma Zahir Bukhari confirmed the withdrawal of the power subsidy.

However, Prime Minister Shehbaz Sharif was working to provide a nationwide power subsidy.

A Staff-Level Agreement (SLA) between Pakistan and IMF for a new 37-month $7 billion Extended Fund Facility (EFF) was signed in July.

However, the agreement will be effective after the approval of the IMF’s Executive Board, which has yet to place Pakistan in the meeting schedule.

The sources said that although Pakistan has not been included in the IMF’s calendar until September 18, this does not necessarily mean the country is out of the Fund’s agenda.