Pakistan Faces IMF Pressure With Gas Tariff

The departing government is poised to announce a substantial increase in gas prices as the nation grapples with economic challenges. The Economic Coordination Committee (ECC) granted approval for a significant surge in gas prices on Wednesday, aligning with the deadline imposed by the International Monetary Fund (IMF).

Amidst the struggles of the population to afford basic necessities, the ECC greenlit an average tariff hike of 35.13% for gas consumers in Punjab, KP, and Islamabad. Meanwhile, consumers in Sindh and Balochistan faced a comparatively modest increase of 8.57% in the tariff.

Read more: No Relief, Outgoing Government Raises Gas Tariff

The new tariff structure approved by the Economic Coordination Committee stands at Rs1673.82 per MMBTU for Sui Northern and Rs1466.40 per MMBTU for Sui Southern. The final decision on implementing these changes lies with the Federal Cabinet, which is expected to act in accordance with the IMF’s stipulated deadline to raise gas prices as part of the structural benchmark criteria.

The petroleum ministry advocated for an increase in gas rates for bulk domestic and special commercial purposes. Additionally, officials recommended a surge in feed and fuel gas prices for the Engro Fertiliser and Fauji Fertiliser Bin Qasim plants to Rs760/MMBtu and Rs1,750/MMBtu, respectively, effective from March 1, 2024.

The decision to raise gas prices comes at a challenging time for the Pakistani population, many of whom are already grappling with economic hardships. The ECC’s approval of these tariff hikes aligns with the conditions set by the IMF, indicating the government’s commitment to meeting the agreed-upon benchmarks despite potential challenges for citizens in managing their household expenses.