Notifying new gas rates every six months during a fiscal year is something Pakistan has failed to do, according to the International Monetary Fund (IMF).
IMF Mission Urge to Caretaker Govt.
IMF’s Mission urged the caretaker government to implement biannual gas rate hikes during the ongoing first review of Islamabad’s $3 billion Standby Arrangement in order to reduce the country’s gas circular debt, which has grown significantly since 2013.
The caretaker government raised gas tariffs with effect from November 1, 2023, and the international lender was informed of this.
Revenue Gain
According to officials, this will bring in Rs. 980 billion in revenue in eight months, meaning the government might forgo raising the gas price that is scheduled to take effect in January 2024.
The international lender claims that political considerations prevented the previous administration from raising gas prices, and that in order to keep the Rs. 2.9 trillion in revolving debt in the gas sector under control, the caretaker government now in place will need to approve a significant increase.
IMF Mission Meeting with OGRA
In the meantime, the lender also met with OGRA and asked why, after a 40-day gap, the regulator had not informed the gas tariffs.
The Fund was advised that without mandatory directives from the government, the regulator is unable to carry out this task.
To read our blog on “Current Account Deficit will be at $4.5 bn, Pak tells to IMF,” click here.
