No reduction in industrial power prices

The International Monetary Fund (IMF) has not endorsed Pakistan's proposal to further reduce industrial electricity prices by Rs2.70 per unit through the complete elimination of cross-subsidies, which the sector is providing to shoulder subsidies to low-end residential consumers. Energy ministry sources told The Express Tribune that the ministry floated the proposal to further reduce electricity prices for industries by Rs2.70 per unit. This would have provided nearly Rs37 billion relief to the industrial sector for the February-June period of this fiscal year. The annual impact had been estimated at Rs89 billion. The proposal was shared with the IMF last week, which has objected to it on the grounds that the government should aim at overall power sector reforms. The IMF's objection was that Pakistan should not implement this proposal in isolation. The government is working on a proposal to move from a general to a targeted subsidies regime in collaboration with the IMF. The new regime may be rolled out in July this year, which would address the issue of cross-subsidies, said the sources.