ISLAMABAD: The International Monetary Fund (IMF) has cautioned that higher energy prices could weaken energy sector’s financial position, especially if not permitted to pass along price increases, leading to more buildups or more arrears.

Placing the issue of energy sector as medium/high risk, the IMF has asked Pakistani government to allow energy prices increases to be passed through to end-users. The authorities have also been asked to press ahead with reforms of the energy sector.

The stock of payment arrears includes the payables of PRs 2,280 billion (of which PRs 930 billion held at PHPL) as of end-FY 2020/21. The projected evolution of the stock and the flow of payables, including measures (policy and surcharges) and its components are as follows: FY 2021/22, target of total flow for end-December was Rs 67 billion, end- March 184 billion and end-June 166 billion. Operational parts of the targets till end-December are Rs 126 billion, end-March Rs 174 billion and end-June Rs 244 billion.

Discos’ losses and inefficiencies are targeted to be Rs 40 billion till end-December, Rs 54 billion end-March and Rs 77 billion end-June and Discos under recoveries Rs 86 billion. The Discos’ under recoveries are targeted at Rs 86 billion end-December, Rs 120 billion end-March and Rs 167 billion end-June.

Copyright Business Recorder, 2022