LAHORE: Successive Pakistani governments have failed to reform the country’s energy sector, which has contributed to the crisis. However, the present price hike is part of a $3 billion deal between the International Monetary Fund (IMF) and Pakistan, approved in July 2022, that mandates the government remove energy and fuel subsidies and move to a market-based exchange rate, as well as increase taxes.
Human Rights Watch, in a statement issued Thursday, said: “HRW opposes fossil fuel subsidies in principle due to their adverse impact on climate change; however, removing subsidies without adequately investing in social security often means that price increases disproportionately impact those on low incomes. Electricity price hikes can also increase the cost of food, housing, other goods, and essential services. Human Rights Watch believes that the right to an adequate standard of living includes everyone’s right, without discrimination, to sufficient, reliable, safe, clean, accessible, and affordable electricity.
“The IMF should undertake a thorough assessment of the impact of these adjustments. Prior to phasing out subsidies, they should put in place a comprehensive reform plan that can mitigate price increases and facilitate the transition to sustainable energy.
These reforms could include introducing a system of universal social protection, which would provide benefits to people with heightened risks of income insecurity, such as children, older people, and people with disabilities,” the statement concluded.
