Pakistan raises fuel and power prices, a key IMF demand for a $6 billion bailout package

In order to get the first payout from the $6 billion bailout package from the International Monetary Fund (IMF), the Shehbaz Sharif government in Pakistan has raised fuel and electricity prices, which is a key IMF demand for releasing funds.

The government has decided to hike the electricity prices by PKR7, and petrol and diesel by PKR30 per litre in order to stabilize the country’s economy amid a deepening political crisis.

This comes after IMF expressed concern over the PKR2,600 billion power tariff.

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The Fund had suggested the government immediately privatize the public-owned profitable DISCOs, reported ARY News.

As reported by ANI, keeping in mind the debilitating state of loss-making DISCOs, the fund advised the handover of these DISCOS to the provinces. "The hike in power tariff will be applicable from July 01," said the sources privy to the matter.

The decision may cost the new coalition government popular support adding to the political uncertainty that has taken over the country since Prime Minister Imran Khan was ousted in a no-confidence vote in Parliament early last month.

Last week Mr Khan held a huge political rally, drawing huge crowds and heavily criticizing the current coalition government and the military. At least 1,700 protesters were arrested by the police in Punjab.

Some officials now fear that the government’s move to appease the I.M.F. could hand Mr Khan a wave of public outrage that he could manipulate on the streets.

Mr Khan’s government had also applied for a bailout package from IMF but had failed to meet loan conditions.

Mr Sharif had been reluctant to end government electricity subsidies and oil subsidies fearing a public backlash that could affect his party’s chance of success in the next general elections.

Those elections are scheduled to be held next year, but the new government has come under mounting public pressure from Mr Khan’s supporters to hold them earlier.

This fuel and electricity price hike will badly affect the common man and raise the country’s inflation rate.

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