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Wednesday, September 27, 2023
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EditorialIMF rejects relief plan

IMF rejects relief plan

It comes as a heavy blow to those who have been fervently protesting the relentless surge in fuel bills across the nation. The International Monetary Fund (IMF) has rejected the relief plan presented by the caretaker government to alleviate the financial burden on consumers. Instead, the IMF’s assessment suggests an estimated impact exceeding a staggering Rs15 billion, as opposed to the government’s more optimistic projection of Rs6.5 billion.

The caretaker government’s proposal was meant to be a lifeline for consumers, but the IMF in not convinced. The fate of this relief effort hangs in the balance, subject to further negotiations between government officials and IMF representatives. What was initially promised to be resolved within 48 hours may now extend to a protracted struggle.

In addition to the impending quarterly adjustment, the government has also sought an extension of the additional tariff levy period, a move that may increase electricity rates by an alarming Rs7.5 per unit. The relief plan had originally offered a glimmer of hope, envisioning reductions of Rs3,000 in bills for 300-unit users in September, followed by a more substantial Rs8,000 rupee reduction in October. It proposed the convenience of bill collection in installments, offering consumers a more manageable approach as the harsh winter months loom.

Pakistan’s hands are tied due to a prior agreement with the IMF in the $3 billion loan. This agreement restricts Pakistan from taking any significant financial measures without IMF approval. The caretaker government is racing against time to find a short-term remedy to this predicament.

Caretaker Prime Minister Anwarul Haq Kakar says action will be taken against power thieves and defaulters. He has called for a shift towards renewable and hydel sources in future power generation projects and demanded immediate steps to curtail losses incurred by distribution companies.

While addressing foreign media, Prime Minister Kakar has reassured the public of the government’s commitment to exploring unconventional, fact-based solutions to alleviate the burden on electricity consumers. However, Energy Minister Muhammad Ali says until the prices of petrol and the dollar decrease, cheaper electricity remains a distant dream. Minister Ali has pledged a relentless crackdown on electricity theft and fraud, emphasizing that unraveling the intricate web of international agreements and combating power theft is a complex and time-consuming process.

Simultaneously, reports have surfaced regarding a crackdown on those who exploit the slab system by installing multiple meters in their homes and buildings. The government’s multifaceted approach aims to provide relief to consumers, but it is undeniable that the crux of the problem lies in the quest for affordable electricity generation. Without addressing this fundamental issue, the people’s grievances will persist, and industries will bear the brunt of escalating electricity costs, inevitably fueling inflation further.

In the wake of the IMF’s refusal, the path ahead appears challenging, with the government and its citizens caught in a relentless battle to balance the scales of financial hardship and economic stability. The road to relief is fraught with obstacles, and it remains to be seen whether Pakistan can overcome them to provide respite to its beleaguered populace.

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