ISLAMABAD: Fuel shortage in Pakistan has worsened power blackouts that made it difficult to meet key reform targets laid out by the IMF.
The IMF granted a $6.6 billion ($A8.39 billion) loan to Pakistan in September 2013 on the condition that it carry out extensive economic reforms, particularly in the energy and taxation sectors.
The country is currently in the grip of one of its worst power crises in years due to a shortfall in imported oil, with the situation exacerbated by an attack on a key powerline in restive Baluchistan province.
Increasing energy imports without addressing structural issues that create so-called circular debt ‘will further strain Pakistan’s budget and balance of payments, a credit negative’.
‘Fuel shortages also reflect the strained finances of state-owned distribution companies and the fuel importer, Pakistan State Oil corporation, and are a setback to the sector’s progress on reforms made so far under Pakistan’s financial support program with the International Monetary Fund.’
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