Govt hikes gas price up to 124%

By Muhammad JuniadPublished On 14 Feb 2023

In another move towards fulfilling the IMF conditions to unlock a billion-dollar loan, the Economic Coordination Committee (ECC) of the cabinet on Monday approved a gas price revision proposal for domestic, commercial and power sectors for six months from January to June 2023.

The government’s financial team has agreed with the IMF team to increase the gas and electricity tariff while slashing subsidies for the revival of a multibillion dollar loan.

Finance Minister Ishaq Dar presided over the ECC meeting.

After the ECC approval, the government increased the gas price between 16 and 124%. However, the increased rate will not apply to those consuming 50 cubic meters of gas.

A fixed charge of Rs50 has been levied on protected customers, while Rs500 will be charged from non-protected domestic customers.

Gas prices have also been hiked for commercial, industrial and power sectors. The gas tariff for commercial customers has been fixed at 3,000MMBTU.

The gas tariff for non-protected domestic consumers has been increased from 121 to 200 cubic meters. For the 121 cubic meter customers, the tariff was increased by Rs79.

The Ministry of Energy (Petroleum Division) tabled a summary on Natural Gas Sale Pricing FY 2022-23, and presented tariff proposals for all consumer categories in accordance with Review of Estimated Revenue Requirement FY 2022-23.

Debt relief

Meanwhile, the Ministry of Economic Affairs presented a summary on G-20 Debt Service Suspension Initiative (DSSI).

This debt relief was announced in April 2020 for IDA eligible countries to mitigate the socio-economic impact of Covid-19. Under this initiative, debt relief was extended through the suspension of principle and interest payments.

So far, 37 debt rescheduling agreements with 15 creditor countries have been signed. Foregoing in view, the ECC allowed the Ministry of Economic Affairs to sign the debt rescheduling agreement with Russia for debt suspension of Covid-related amount of $14.53 million.

Technical grant to BISP

The Ministry of Poverty Alleviation and Social Safety also presented a summary for enhancement of the BISP budget.

The meeting was briefed on the ongoing BISP programs, including Unconditional Cash Transfer Programme ‘Benazir Kafaalat’ covering around nine million families, two Conditional Cash Transfer programs – ‘Benazir Taleemi Wazaif’ and ‘Benazir Nashonuma’.

This disbursement of cash assistance to flood affectees as emergency relief worth Rs25,000 was provided per affected family to around 2.7 million families.

Under the Conditional Cash Transfer Program, there has been accelerated enrollments in Benazir Taleemi Wazaif, and it is anticipated that an additional one million children will be enrolled by the end of June.

Also, the BISP has extended Benazir Nashonuma to all the districts of the country.

The ECC also granted Rs40 billion as technical supplementary grant to BISP to meet its budgetary requirements for increase in the unconditional and conditional grants.