In a much-anticipated announcement ahead of Eid, Prime Minister of Pakistan has revealed a reduction of more than seven rupees per unit in electricity prices for domestic consumers. The government claims this ‘relief’ was achieved after convincing the IMF.
Convincing the IMF: A Challenging Task
Pakistan is currently under a seven-billion-dollar loan agreement with the IMF, which prohibits offering any subsidies or concessions. Prime Minister Shehbaz Sharif acknowledged that convincing the IMF to approve this reduction was a difficult task. However, the price reduction has been hailed as a necessary step for the country’s economic development.
Mixed Reactions on Social Media
The announcement has received a mixed response on social media. While government officials have celebrated it, critics point out that the increase in electricity prices in recent years has been significant, and the reduction now is insufficient.
How Pakistan Convinced the IMF
Speaking at a special event, Shehbaz Sharif explained how the government used the recent drop in global oil prices to negotiate cheaper electricity prices. Despite initial refusal from the IMF, the government persisted and ultimately succeeded in convincing them to approve the reduction.
Energy Sector Challenges and Reforms
The Prime Minister also addressed the challenges facing Pakistan’s energy sector, including circular debt. He promised that the government would introduce a five-year plan to reduce this debt, make electricity cheaper by setting up an open market, and privatize distribution companies (DISCOs) immediately.
Public Reactions to the Announcement
While Information Minister Ataullah Tarar referred to the announcement as a “historic relief package,” critics, including economists and opposition members, have questioned whether it will be enough. Economists like Khurram Hussain emphasized that the government needs to do more to address the underlying issues in the energy sector.