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

Pakistan caretaker government is likely to jack up gas tariff by 100pc on the International Monetary Fund’s (IMF) demand, ARY News reported, citing sources. 

According to sources knowing the matter, the IMF demanded an increase in gas tariff from up to 100pc before the next economic review to curtail circular debt in the gas sector.

Sources said the shortfall of Rs185 billion will be added to the circular debt of the gas sector if the gas tariff is not increased. The current circular debt of the gas sector is touching Rs2,700 billion.

They further said from July-September, 2023, the gas companies have added Rs46 billion more to their overall losses.

The summary for the hike has been ‘prepared’ and is likely to be presented before the next meeting of the Economic Coordination Committee (ECC).

Read more: IMF asks Pakistan to further hike power, gas tariffs

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.