Islamabad (Commerce Desk): The government and the International Monetary Fund are set to hold talks on the fourth economic review next week. The discussions will include detailed briefings on energy-sector reforms, privatization, and plans concerning circular debt in the electricity and gas sectors, while a change in the base electricity tariff is also possible.
According to sources, measures to improve electricity and gas transmission systems, reforms, and greater private-sector participation will also be discussed during the talks.
The government has set tariffs for the competitive electricity market, but the bidding process has not yet begun. Expressions of interest for the privatization of the Islamabad, Faisalabad and Multan electricity distribution companies have already been issued.
Sources said local and foreign investors have also expressed interest in purchasing these distribution companies. The government has set a target of keeping the circular debt in the power sector at Rs1,614 billion, while a change in the base electricity tariff is expected in January 2027.
A proposal is also under consideration to provide electricity subsidies to eligible consumers through an income support programme next year. However, concerns have been raised that electricity could become more expensive if the full cost of electricity is recovered from consumers and cross-subsidized tariffs are abolished.