IMF Confirms Talks on Pakistan’s Electricity Tariff; Warns Against Burdening the Poor. -

In a significant move for Pakistan’s energy sector, the International Monetary Fund (IMF) has confirmed it is discussing proposed electricity tariff revisions with Pakistani authorities. The global lender emphasized that any changes must align with the country’s $7 billion Extended Fund Facility (EFF) while ensuring that the burden does not fall on vulnerable populations.

Key Takeaways from the IMF Statement

Protective Approach: In a statement on February 14, 2026, the IMF explicitly stated that the “burden of the revisions should not fall on middle- or lower-income households”.
Industrial vs. Domestic Focus: The government’s proposed overhaul aims to ease financial pressure on the industrial sector—causing industrial prices to potentially fall by 13% to 15%—while ending the current system where businesses subsidize household energy.
Inflationary Impact: Analysts warn that while the plan may boost industrial competitiveness, it could lead to a 1.1 percentage point jump in inflation over 12 months, with middle-class households potentially facing a 50% increase in power costs.
Circular Debt Management: The IMF noted that the accumulation of circular debt has been successfully contained within program targets, thanks to improved recoveries and loss prevention.
Upcoming Compliance Review: The ongoing discussions will evaluate if these tariff revisions are consistent with existing program commitments and assess their overall impact on macroeconomic stability.