ISLAMABAD – Finance Minister Muhammad Aurangzeb announced that negotiations between Pakistan and the International Monetary Fund (IMF) for a $1 billion-plus tranche wrapped up successfully, with an official IMF statement expected Saturday, March 15, 2025. Today Pakistan News reports on this breakthrough, shared during a meeting chaired by Prime Minister Shehbaz Sharif at the Prime Minister’s House to address business community concerns, per government sources.
Sharif pressed Aurangzeb on whether the IMF delivered the Memorandum for Economic and Financial Policies (MEFP), the blueprint for loan conditions. “All is set, and the IMF will issue its statement tomorrow,” Aurangzeb reportedly assured the PM on Friday in front of business leaders. Though Aurangzeb didn’t confirm the remarks directly, multiple attendees corroborated the exchange to The Express Tribune.
Sources revealed plans to hike the petroleum levy to Rs70 per liter—a Rs10 jump—to fund lower power prices, absorbing the reduction via increased fuel revenue. The IMF talks, spanning March 3-14, covered the first review of the Extended Fund Facility (EFF) for July-December and pre-EFF Climate Resilience Facility (CRF) discussions. The EFF’s $1 billion tranche awaits May board approval, alongside a $1 billion CRF tied to climate spending.
Finance Ministry sources noted a broad MEFP agreement was reached before the IMF team left, with a final draft due within a month for board review in early May. On the talks’ final day, the IMF met Aurangzeb and the Finance Secretary, refining details like the Rs791 per million British thermal unit (mmBtu) grid levy, which Pakistan sought to cut by Rs250-300. The IMF rejected this, insisting higher rates push industries from gas-fired captive plants to the grid. Post-levy, gas prices for captive power plants hit Rs4,291/mmBtu, exceeding LNG costs, with planned hikes—10% in July 2025, 15% in February 2026, and 20% by August 2026—aiming for Rs6,000/mmBtu.
Lahore industrialists raised concerns over 600 stuck import containers in Karachi, prompting Sharif to order the Federal Board of Revenue (FBR) to clear them over the weekend. Taxation talks for the next fiscal year proposed an 18% sales tax at import, with retail deductions to curb disparities, alongside FBR pledges to end tax distortions and rebates. A Rs3 per liter carbon levy on petrol and diesel, rising to Rs7 by 2027, was agreed upon despite government fears of smuggling and political backlash, which the IMF dismissed.
