Islamabad [Pakistan], May 27 (ANI): Ceding to the demands of the International Monetary Fund for the release of USD 1 billion tranche of loan, the Pakistani government led by Prime Minister Shehbaz Sharif has decided to hike the electricity prices by Rs 7 besides privatization of profitable public-owned DISCOs.

This comes after IMF expressed concern over the Rs 2,600 billion power tariff. The Fund had suggested the government to immediately privatize the public-owned profitable DISCOs, reported ARY News.

Keeping in mind the debilitating state of loss-making DISCOs, the fund advised the handover of these DISCOS to the provinces. "The hike in power tariff will be applicable from July 01," said the sources to privy to the matter. According to them the hike of Rs 7 in electricity prices would include an increase in basic tariff and fuel adjustment charges.

Meanwhile, the Trade and industry leaders of Pakistan have slammed the Shehbaz Sharif government for increasing the petrol and diesel prices by PKR 30 per litre causing a surge in the cost of production in the country.

Zubair Motiwalla, from the Chairman Businessmen Group of Pakistan(BMG), has anticipated a surge in production cost by 5-7 per cent due to the increase in petroleum price, reported Dawn newspaper.

He added that the rise in petroleum rates will heavily impact the retail prices of goods, making the lives of the common man more miserable owing to the rising cost of living."The jump of Rs 30 per litre in petrol and diesel will be difficult for the people and the industry to absorb," Dawn newspaper quoted Motiwalla saying.In addition, he mentioned that the Pakistan government should have increased the rates of petroleum in phases.

This price hike came after talks between the Pakistan government and IMF in Doha. These discussions were aimed at reaching an agreement on policies at the conclusion of the IMF's seventh review of its USD 6 billion programmes for Pakistan, which has been stalled since early April.

Although the increase in fuel prices would cause a surge in inflation, it will pave the way for Pakistan to achieve an IMF loan tranche of about USD 1 billion. It would further unblock assistance from other multilateral and bilateral lenders, shore up foreign exchange reserves, improve the exchange rate and energise the stock market.

Meanwhile, former Prime Minister Imran Khan has also slammed Shehbaz Sharif for his decision of the petroleum price hike. Pakistan on Thursday raised the prices of petroleum products by PKR 30 per litre, stating that the decision was taken to ensure the revival of the IMF programme. (ANI)