Govt Seeks 6-Month Delay on IMF Demand to Disconnect Power Plants From Gas Supply

Islamabad, Nov 29: The federal government is seeking a six-month delay in meeting the IMF’s requirement to disconnect captive power plants (CPPs) from gas supply by January 2025.

Key Points from the High-Level Meeting

1. Tariff and Gas Supply Concerns
   • Industrial gas tariffs will align with RLNG costs by January 2025 to boost grid electricity consumption.
   • CPPs currently contribute Rs. 150 billion in cross-subsidies, essential for domestic gas consumers.
2. Potential Impacts
   • Commerce Minister: Warned of declining foreign exchange inflows and damaged exporter confidence.
   • Petroleum Minister: Highlighted risks of increased circular debt and losses in the gas sector.
3. Grid Transition Challenges
   • Power Minister: Transitioning CPPs to the grid would require over a year and Rs. 25 billion for infrastructure upgrades.
   • Concerns persist about the grid’s ability to ensure stable electricity.

Next Steps

The government will present detailed data to the IMF mission to negotiate lifting or delaying the condition.