The Prime Minister Shehbaz Sharif-led government has assured the International Monetary Fund (IMF) that scheduled increases in electricity and gas prices will be implemented as part of a broader strategy to stabilise Pakistan’s economy and address fiscal challenges.
Officials briefed the IMF on a series of measures aimed at boosting tax revenue, reforming the energy sector, and controlling the growing circular debt. With a significant tax shortfall projected for the current fiscal year, the government plans to strengthen enforcement of existing tax laws and finalise a roadmap for additional revenue measures by the end of this month.
Proposals under consideration include a 5% increase in federal excise duty on fertilisers and chemicals, along with new taxes on premium sugary products. Authorities also intend to intensify oversight of the cement and sugar industries, take action against non-filers and undeclared asset holders, and bring around 40,000 large retailers under full Point-of-Sale monitoring within the next two years. Digital invoicing will be expanded, and some items may be shifted from the reduced-rate GST schedule to the standard GST framework.
On the energy front, the government reaffirmed its commitment to revising electricity and gas tariffs in line with IMF agreements. Under the excess electricity consumption scheme, automatic tariff adjustments will be triggered if costs rise. The scheme, which cannot be extended, will end after three years or earlier if tariffs increase in two consecutive reviews. While protections for vulnerable consumers will remain in place, tariffs for industrial and agricultural users may be raised if revenue targets are not met.
The Gas Sector Circular Debt Management Plan is expected to be published by March 2026, with the long-term objective of eliminating circular debt by 2030–31. Measures to curb gas theft and reduce line losses are also part of the reform agenda. In addition, the privatisation of Islamabad, Gujranwala, and Faisalabad Electric Supply Companies is planned for early 2026.
Officials also outlined a new power sector strategy aimed at eliminating 7,000 megawatts of surplus electricity capacity. The move is expected to reduce tariffs over time and save an estimated $17 billion over the next decade by improving efficiency and easing the financial burden on both consumers and the government.
