The International Monetary Fund (IMF) has urged Pakistan to implement electricity tariff adjustments on time, warning that delays could increase pressure on the country’s energy sector and contribute to the growing circular debt.
The Fund has called for faster reforms to improve the financial position of Pakistan’s energy sector, where persistent losses and unpaid costs continue to create financial challenges.
According to the IMF, electricity and gas tariffs need to be adjusted in a timely manner to prevent unpaid costs from accumulating across the energy supply chain.
Delays in tariff revisions can widen the gap between the cost of supplying electricity and the revenue recovered from consumers. This shortfall can contribute to further accumulation of circular debt.
The IMF has also emphasized the need to reduce electricity-sector losses and improve the financial performance of energy companies.
Pakistan continues to face significant challenges in controlling the accumulation of circular debt in the power sector.
The government has committed to reducing the flow of new electricity-sector circular debt during the current fiscal year as part of broader efforts to strengthen the financial sustainability of the energy sector.
The IMF has stressed that addressing structural weaknesses in the power sector will be essential for improving its financial position.
The IMF has also called for continued cost-based adjustments to gas tariffs.
Under this approach, gas prices would be aligned more closely with the actual cost of supplying the commodity, helping prevent additional financial losses from accumulating within the gas sector.
The IMF’s recommendations could result in further electricity and gas price adjustments for consumers as Pakistan moves toward cost-based tariffs.
The Fund has warned that continued weaknesses in the energy sector could create risks for Pakistan’s broader fiscal stability.
The government is therefore expected to continue implementing energy-sector reforms aimed at reducing losses, limiting circular debt accumulation and improving the financial health of power and gas companies.
