IMF conditions: Pak ministries at odds on gas supply cut to industries, power plants
New Delhi: Cash-strapped Pakistan’s finance and energy ministries are at loggerheads over implementing a key condition imposed by the International Monetary Fund (IMF) to reduce gas supplies to industries and power plants by January 2025, as part of the USD 7 billion bailout agreement.
During a recent meeting at the Prime Minister’s House, the Petroleum Division, a part of the Energy Ministry, claimed that the Finance Ministry accepted the IMF condition despite its reservations at the time of the program negotiations, The Express Tribune newspaper reported on Saturday.
The division claimed that abrupt disconnection of gas supply to industries might cause a PKR 42,700 crore loss to the government and the industries.
However, the finance ministry insisted that the Petroleum Division was fully on the board at the time of the negotiations with the global lender and was now changing its position.
Despite the escalation of the dispute, Prime Minister Shehbaz Sharif’s government could not resolve the differences, the paper said.
The PM himself held at least two meetings on the issue, while four meetings were also held with the IMF in the last week.
Within weeks of Pakistan signing almost 40 conditions with the IMF, the two ministries started quarreling on gas supply issues to industries.
The Petroleum Division has estimated hundreds of billions of rupees in losses if the supplies are disrupted suddenly, including the PKR 100 billion cross-subsidy that is recovered from the industrial consumers to supply gas at cheaper rates to residential consumers.
According to the IMF deal, the gas sector reforms will focus on price normalization across sectors and captive power elimination.
