• “Pakistan has already completed all conditions of IMF,” Ishaq Dar says.
• FinMin says some powers do not want economic stability in Pakistan.
• Financial czar slams Imran Khan-led govt for violating pact with IMF.

Finance Minister Ishaq Dar has revealed that the coalition government has agreed to share details of its upcoming budget details with the International Monetary Fund (IMF) in order to unlock the stalled funds.

“They have asked us for some more details like the details of (the) budget, we will give that to them,” Dar said while speaking on Geo News programme Jirga on Sunday.

He reiterated that the country has fulfilled all conditions laid forth by the Washington-based lender to revive the stalled $6.5 billion programme and urged the global lender to release the funds before the upcoming federal budget due next month.

The financial czar said some powers do not want economic stability in Pakistan and blamed the previous Pakistan Tehreek-e-Insaf (PTI) government for “destroying” the country’s economy.

“Record inflation was witnessed during Imran Khan’s tenure,” he said, adding that the former prime minister did not honour the agreement with the IMF.

The IMF’s $1.1 billion funding to Pakistan, which is part of the $6.5 billion rescue package agreed in 2019, has been held up since November.

The IMF and Pakistan held two weeks of talks in February in Islamabad to conclude the 9th review, but the lender has not yet released the money, which is critical for the country to unlock other bilateral and multilateral financings.

The federal minister further said that he would want the IMF to release the funds before the budget was presented, which is due in early June.  He added, “We will not do the 9th and 10 reviews together. This is unfair.”

Pakistan is making last-ditch efforts with the IMF to revive the stalled Extended Fund Facility (EFF) programme, The News reported earlier this month.

The hopes are diminishing each day mainly because the ongoing programme of $6.5 billion under the EFF will expire on June 30.

The parleys between Pakistan and the IMF continue for the completion of the ninth review, which was due on November 3 of last year. The formal negotiations started on January 31 when an IMF delegation visited Pakistan for in-person talks.

However, the two sides could not reach a consensus during the course of scheduled talks that ended on February 9. Since then, multiple online sessions have been held but the differences persist on conditions set by the Fund for the Staff Level Agreement (SLA).

If the SLA is not struck ahead of the upcoming budget for 2023-24, scheduled to be unveiled on June 9, the ongoing programme will face a failure.

“There are a couple of options left for moving forward. The first is by signing the SLA on an immediate basis and forwarding Pakistan’s request before the IMF Executive Board for approving the next tranche of $1 billion and also securing an extension in the EFF programme period by a few months in order to accomplish the 10th and 11th Reviews,” sources, privy to the background discussions told the publication.

The second option could be combining the 9th and 10th reviews and for Pakistan to share upcoming budgetary numbers with the IMF.

Then the SLA should be signed after the announcement of the budget and in case of its approval from parliament, the IMF’s Executive Board could approve combined tranches and also grant an extension to the EFF programme for accomplishing the 11th Review by July or August 2023.

“There are no easy options available; both sides will have to work out modalities for evolving consensus. But with the existing approach of maintaining the status quo, no breakthrough can be achieved,” said the official who spoke on the condition of anonymity.

A study found that rising electricity tariffs are increasingly moving beyond the affordability of the masses and adversely impacting their consumption patterns. 

The study was conducted by the Institute of Policy Studies, Islamabad titled “Impact of Rising Electricity Prices on Consumer Behavior: The Case of Power Distribution Companies in Pakistan”. 

The research study covered over 1,000 households and 140 shop owners in the top 10 cities of Pakistan.

The survey results indicate that most of the respondents have experienced moderate to significant increases in their electricity bills in recent months. 

The study further highlights the correlation between the magnitude of the bill increase and the extent of consumption reduction, indicating that higher price hikes lead to more significant efforts in reducing electricity usage. 

However, despite the overall reduction in electricity consumption, a significant portion of the survey participants reported no noticeable decrease in their bills.

It recommends the need for improved governance and regulatory measures in the energy sector along with affordable electricity tariffs and alternative payment options to accommodate different economic circumstances. 

The study also stresses the importance of addressing issues such as load shedding and raising consumer awareness about peak hours when electricity costs are higher.

Moreover, it also found that the alarming trend also caused a sharp decline in the recoveries of distribution companies (DISCOs) which can lead to difficulties in paying for power purchases from the generation companies, maintaining distribution networks, and servicing debts.

These factors further hinder the ability of DISCOs to invest in infrastructure upgrades, provide quality services, and improve the overall reliability of electricity supply.

The research emphasises effective measures to address power affordability concerns and suggests strategies for distribution companies to mitigate the negative effects of rising prices. 

Overall, the study provides valuable insights into the impact of rising electricity prices on consumer behaviour in Pakistan and offers recommendations for DISCOs and policymakers to address affordability concerns and ensure a sustainable balance between electricity prices and consumers’ ability to bear these costs.

With all the hype around Russian oil, the foremost question that every Pakistani has is what effect the imported oil will have on the high fuel prices.

Minister for Planning, Development and Special Initiatives Ahsan Iqbal answered the question in a recent interview with Voice of America (Urdu).

When asked whether the price of petrol — which had reached a record high of Rs282 per litre and currently stands at Rs272 per litre — would be slashed by Rs100 once Russian oil reached Pakistan, the minister responded in the negative.

“There might not be a significant difference,” he said. However, the price would “definitely reduce” once Pakistan started importing large quantities of Russian oil, he added.

“At the beginning, the quantity of imported oil is small, but as it increases in six months to a year, it will help reduce petrol prices,” Iqbal said.

Pakistan and Russia had been negotiating an oil deal for months before reaching an agreement in April.

The first shipment of Russian oil is expected to dock at the Karachi port in late May, State Minister for Petroleum Mussadik Malik had said last month. The country would seek to import 100,000 barrels per day (bpd) of Russian crude oil if the first transaction went smoothly, he had added.

Initially, the Pakistan Refinery Limited (PRL) would refine the crude oil in a trial run, to be followed later by Pak-Arab Refinery Limited (PARCO) and other refineries.

A day earlier, Malik shared that Pakistan plans to import one-third of the country’s total crude oil requirements from Russia.

The state minister revealed that the government has finalised a comprehensive energy security agreement with Russia, which would cover different aspects of the energy supply in the country.

Malik said: “We want to open an energy corridor with Central Asia like the one we have with Gulf countries.”

“This would reduce the cost of energy in the country and would be helpful in the development of industrial clusters and value additions in the agriculture sector,” he maintained.

The minister revealed that the government’s objective is to import 18-20% of its total crude oil imports from Russia, with the hope that this move will substantially lower petroleum product prices for domestic consumers.