TUNIS- Tunisia plans to lower electricity and fuel subsidies to reduce a budget deficit driven by high oil prices, Tunisian Industry and Energy Minister Naila Nouira told newspaper Assabah on Friday, in a key reform asked for by international lenders.

Tunisia, which is suffering a financial crisis, is seeking to obtain a rescue package from the International Monetary Fund (IMF) in exchange for unpopular reforms, including spending cuts, to avert a collapse in public finances.

"We will review the prices of fuel and electricity by raising it. The increase will not include domestic gas", the minister said.

The ministry could not be reached for comment.

The IMF held a virtual meeting with Tunisian officials on Feb. 14 to discuss the government’s economic reform programme which also includes plans to freeze public sector pay, a move that could anger the UGTT powerful labour union.

Tunisia's economy has been hit hard by the pandemic after years of stagnation, compounded by political turmoil. President Kais Saied in July suspended the parliament and seized control of executive powers, pausing Tunisian talks with the IMF and major Western lenders who have said he needs to restore normal constitutional order.

The minister said also on Friday that Tunisia would grant licenses for renewable energy projects to produce 2,520 megawatts between 2022-2025, as the country aims to produce 30% of electricity through renewables as of 2030.

(Reporting by Tarek Amara Editing by Mark Heinrich and Raissa Kasolowsky) ((tarek.amara@thomsonreuters.com;))