IMF praises oil crisis handling, urges gas sector reforms

The International Monetary Fund has praised Pakistan for managing the oil crisis across six months of the US-Iran conflict without supply shortages or extra strain on the budget, according to Dawn. The Fund also asked authorities to speed up groundwork on targeted gas subsidies and on gas-sector debt, now around Rs3.6 trillion.

Dawn sources said the gas segment is not yet prepared for a uniform tariff built on Ogra's average price of about Rs1,700 per mmBtu, citing weak data and unclear ownership records. The IMF staff is reportedly unconvinced by the groundwork so far, as gas meter and premises records are poorly documented, unlike power-sector records.

On power, the Fund reportedly accepted that the sector beat efficiency targets on bill recoveries and loss reduction, and the wider debt rise was tied to Rs95bn in lower Finance Ministry subsidy payments. Dawn also noted that K-Electric could have cut the debt further by paying around Rs200bn on time rather than holding up disbursements through litigation. The high court and appellate tribunal reportedly upheld a Nepra decision that would bring around Rs200bn in savings to power companies, while KE still has further legal options. Government and IMF officials are expected to finalise plans next week for direct cash subsidies to poor power consumers through the Benazir Income Support Programme, rather than subsidised tariffs.