Measures to revive IMF deal: President Alvi advises taking parliament into confidence 'more appropriate'

President Dr Arif Alvi on Tuesday advised Finance Minister Ishaq Dar to take the parliament into confidence and call an immediate session to pass bills related to measures for revival of the International Monetary Fund (IMF) programme, said a statement released by the Ministry of Finance.

In a meeting with Alvi, Dar stated that the government wanted to raise additional revenue through taxes by promulgating an ordinance.

“The president advised that it would be more appropriate to take the parliament into confidence on this important subject, and that a session be called immediately so that the bill is enacted without delay,” the statement added.

Dar apprised President Alvi about the progress in talks with the IMF and that all modalities have been agreed upon.

“The president appreciated the government’s efforts for negotiating an agreement with the IMF, and assured that the state of Pakistan would stand by the commitments agreed between the two sides.”

The development comes as Pakistan looks to desperately revive its stalled IMF programme as talks resumed virtually on Monday. The two sides are now looking to reach an agreement that would unlock funding critical to keep the cash-strapped country afloat.

The two could not reach a deal last week and a visiting IMF delegation departed Islamabad after 10 days of talks but said negotiations would continue. Pakistan is in dire need of funds as it battles a wrenching economic crisis.

On Monday, the government increased gas prices by up to 124% for domestic consumers from January 1, 2023, to generate a revenue of Rs310 billion from the consumers in the next six months (January-June 2023) to curtail the circular debt in the gas sector.

In a meeting, the ECC was informed that ERR was issued by the Oil and Gas Regulatory Authority (OGRA) for the fiscal year 2022-2023 on 3rd June 2022 for both gas companies.

As per determination, SNGPL required revenue of Rs261 billion and SSGCL Rs285 billion in the fiscal year 2022-2023 but the OGRA did not allow the previous year’s revenue shortfall.

The hike in gas tariffs was among the prior conditions Pakistan needs to implement. Additional taxation, which Dar said would be to the tune of Rs170 billion, as well as a free-floating exchange rate, enhancement of social safety programmes, and reduction in energy sector circular debt were among the other measures required to move ahead on the IMF programme.