The International Monetary Fund (IMF) is currently in discussions with Pakistani authorities over proposed revisions to electricity tariffs, as confirmed in a statement released on February 13, 2026.
The talks aim to ensure these changes align with Pakistan’s commitments under its $7 billion Extended Fund Facility (EFF) program, while carefully assessing impacts on macroeconomic stability, particularly inflation.
Key Focus of Discussions
The IMF emphasized that any tariff revisions must protect vulnerable groups, stating that the burden “should not fall on middle- or lower-income households.” Ongoing negotiations will evaluate consistency with EFF conditions and potential effects on broader economic indicators like inflation, which remains a sensitive issue despite declining from its near-40% peak in 2023.
Proposed Tariff Overhaul
Pakistan recently announced a major restructuring of electricity pricing, which analysts describe as likely to increase overall inflation while providing relief to the industrial sector.
The plan seeks to meet IMF-mandated reforms in the power sector, including subsidy adjustments and efforts to address longstanding issues like circular debt from unpaid bills and inefficiencies across generation, distribution, and government entities.
Broader Economic Context
These discussions come ahead of the next review of Pakistan’s EFF program, a longer-term facility designed to tackle deep economic challenges and balance-of-payments issues. Electricity tariffs carry significant weight in the consumer price index, making adjustments politically and economically sensitive.
The IMF noted positive progress in containing circular debt growth through better bill recoveries and loss reduction measures.
The power sector has seen repeated tariff hikes since 2023 under IMF-backed reforms to support struggling state utilities and reduce fiscal pressures.