The government has agreed to increase gas and electricity prices as part of the International Monetary Fund’s conditions for a bailout package.
Talks have entered the final phase and the government has already accepted some of the Fund’s terms, like increasing gas and electricity prices.
The IMF has asked the government to impose Rs700 billion more in taxes in the upcoming budget but the government is reportedly only ready to increase taxes by Rs500 billion.
Under these new terms, gas and electricity are going to get more expensive in the next three years. The government is expecting that by levying these new taxes, it will collect an additional Rs340 billion. This means there will be an extra Rs114 billion burden on consumers.
The IMF was given a briefing on the memorandum of economic and financial policy steps and was informed that tariffs can be changed every quarter and OGRA has been given a free hand to approach NEPRA and the gas companies to increase prices.
Subsidies for all users, except people using under 300 units and industries, are being done away with.
After the terms are set, the new state bank governor Reza Baqir will sign the agreement.