APBF Warns IMF Conditions Driving Up Energy Costs, Urges Domestic Solutions

By Farzana Chaudhry
Lahore, Pakistan

LAHORE: The All Pakistan Business Forum (APBF) has urged the government to reduce its reliance on donors and the International Monetary Fund (IMF), warning that externally imposed fiscal conditions are distorting the economy, raising electricity and gas tariffs, and sharply increasing production costs for industry.

In a statement, APBF President Syed Maaz Mahmood said repeated hikes in power and gas prices under IMF programmes are placing an “unbearable burden” on businesses, particularly export-oriented firms and small- and medium-sized enterprises. He stressed that while fiscal discipline is necessary, policies primarily driven by donor conditions without consideration for domestic realities undermine industrial competitiveness and long-term growth.

Syed Maaz Mahmood noted that reductions in power subsidies and strict circular debt targets are directly translating into higher tariffs for both consumers and businesses. Rising energy costs, he said, feed into inflation, weaken purchasing power, and squeeze already narrow industrial margins. Frequent tariff adjustments, fuel surcharges, and debt servicing levies, he added, create uncertainty that complicates production and investment planning.

APBF Chairman Ibrahim Qureshi highlighted that Pakistan’s industrial sector is being forced to bear the costs of systemic inefficiencies in the power and gas sectors, including line losses, poor recoveries, and delayed reforms. Rather than addressing governance and operational failures, he said, the burden is shifted to consumers and taxpayers through higher tariffs, slowing economic activity.

The APBF leadership warned that IMF-driven policies are narrowing the government’s policy space and limiting its ability to support domestic industry. They stressed that high electricity and gas tariffs are making Pakistani products less competitive in regional and global markets, especially as neighboring countries offer cheaper energy and targeted incentives to exporters.

Rising energy prices, they said, affect not only large industries but also small manufacturers, traders, and agricultural value chains. Higher production costs push up the prices of essential goods, contribute to persistent inflation, and create a cycle of declining demand, lower output, and job losses.

Syed Maaz Mahmood urged the government to pursue structural reforms driven by local priorities rather than donor templates. He called for urgent reforms in power distribution companies to reduce theft and technical losses, ensure timely tariff determinations, improve recoveries, and enhance accountability.

The APBF also recommended promoting low-cost energy generation through domestic resources such as hydropower, coal, and renewables. They emphasized that affordable and reliable energy is essential for industrial revival, boosting exports, and generating employment.

Finally, the business forum called for meaningful consultation with the private sector before finalizing agreements with international lenders, noting that policies affecting production costs, employment, and investment should be shaped with stakeholder input.