ISLAMABAD: Pakistan’s caretaker information minister Murtaza Solangi said on Thursday the government could not announce a relief plan for electricity users without approval from the International Monetary Fund (IMF) but was in talks with the global lender over proposals.
The hike in electricity tariffs as well as an increase in petrol and diesel prices have been implemented to meet fiscal objectives laid down in a badly-needed $3 billion short-term financial package from the IMF that Pakistan secured in late June to help it avoid default. The agreement came with tough conditions and fiscal reforms, including a petroleum levy of up to 50 rupees a liter, alongside a string of painful measures such as raising extra revenues, increasing energy prices and a market-based exchange rate, which has already fueled inflation.
Pakistan saw widespread protests and trader strikes through August over high electricity bills and rising petroleum prices.
Speaking to Pakistan’s ARY News broadcaster about the crisis over electricity bills, Solangi said the caretaker government of Prime Minister Anwaar-ul-Haq Kakar had finalized a number of proposals but it could not take “independent” decisions given IMF conditionalities.
“The talks with the IMF are still continuing and I believe this situation will be clearer in the next few days that what kind of relief can be given to people on immediate, mid-term and long-term basis,” the information minister said.
“Many things are final from our side, but even your final things are subject to approval from the IMF. The situation you are in, you are not very independent to make decisions in that.”
Asked about letting some consumers pay bills in installments, Solangi said he could not share details of the government’s plan until a final agreement was reached with the lender.
“We do not want to spread panic and it is inappropriate to share details of what relief we can provide until the talks reach a conclusion … Some final decisions had been made in the last cabinet meeting, but the prime minister did not shun caution and asked the finance minister to [first] share the plan we have made with the IMF.”