IMF asks Pakistan to 'immediately raise' gas tariff

ISLAMABAD: The International Monetary Fund (IMF) has asked Pakistan to ‘immediately raise’ gas tariff, ARY News reported on Thursday, quoting sources within the finance ministry. 

The IMF is seeking 100pc ‘rise’ in the gas tariff to minimize the losses and circular debt in Pakistan’s gas sector.

The international lender showing concerns about not increasing the gas tariff from July 1 during a virtual meeting with the Pakistan finance ministry officials, demanded the caretaker government of Pakistan to immediately approve the hike in gas tariff, the source claimed.

They further said IMF asked the Pakistan finance ministry that denying the increase in gas tariff is a ‘violation’ of the Standby Agreement.

IMF has suggested for recovery of Rs46 billion loss of gas companies from July to September. During the talks, the IMF officials were informed that caretaker Finance Minister Dr Shamshad Akhtar is in China.

The minister will return to Pakistan today, the sources said.

In this context, the Economic Coordination Committee (ECC) meeting has been summoned on Monday to give a nod for jacking up the gas rates.

Read more: Gas tariff likely to be increased by 100pc on IMF demand

Prior to this, it emerged that the government would increase the gas tariff for the fertilizer-producing sector.

Under the new pricing model, the fertilizer sector is expected to experience an increase in gas tariffs to approximately Rs580 per MMBtu for feedstock purposes. The gas would be made costlier for fertilizer fertilizer-producing sector by Rs278 per MMBTu, the sources said and added that the new rate of gas would be Rs1,580 MMBTu.

The talks for the second tranche of the International Monetary Fund (IMF) bailout will likely be held in the last week of October.