In response to pressure from the International Monetary Fund (IMF), the government is now prepared to raise gas prices for all groups, with the exception of protected consumers. This comes after significant increases in electricity costs.
On October 1, 2023, the government is expected to announce a significant rate increase for non-protected domestic consumers of up to 173 percent, commercial rates of 136 percent, export industry rates of 86 percent, non-export industry rates of 117 percent, rates for CNG at 144 percent, rates for cement at 193 percent, rates for Liberty Power at 62 percent, and rates for bulk at 25 percent.
The protected category of home consumers, Roti Tandoor, and feed gas of Engro’s fertilizer plant will be exempt from the rate hike.
As per news sources, the interim government is on the verge of announcing significant increase in gas tariff. The said increase is expected to be applicable from Oct 1st, 2023. pic.twitter.com/BgAK17YEPx
— Ismail Iqbal Securities (@iispl_sec) October 11, 2023
The government would be able to raise an astounding Rs. 435 billion from the people who are struggling with inflation thanks to the IMF’s recommendation for a significant increase in gas prices. The lender has maintained its steadfast position and declined to make any concessions over the gas price increase.
The government has no alternative but to increase the price of gas due to the lender’s imminent assessment under its $3 billion Standby Arrangement for a $1 billion tranche due in November.
The IMF wants the government to come up with a plan to pay off the Rs. 1.7 trillion in circular debt due by the oil and gas sector, of which Rs. 1.3 trillion is owed by the gas sector.