IMF asks Pakistan to ‘immediately raise’ gas tariff

The International Monetary Fund (IMF) has requested that Pakistan ‘quickly boost’ its gas pricing.

IMF asks Pakistan to raise gas tariff: To reduce losses and circular debt in Pakistan’s gas sector, the IMF is requesting a 100 percent “rise” in the gas tariff.

The international lender reportedly urged that the caretaker government of Pakistan swiftly approve the increase in petrol tariff after expressing concerns over not raising the tariff starting on July 1 during a virtual conference with officials from the Pakistan finance ministry.

They added that the IMF had informed the finance ministry of Pakistan that denying the increase in petrol prices constituted a “violation” of the Standby Agreement.

The IMF has proposed recouping the Rs46 billion in losses suffered by gas companies between July and September. “During the negotiations, they informed the IMF representatives that Dr. Shamshad Akhtar, the interim finance minister, is now in China.”

According to the sources, the minister would return to Pakistan today.

In this situation, they have called an Economic Coordination Committee (ECC) meeting to approve the increase in petrol prices.

Prior to this, it became known that the government will raise the petrol tax on the industry that produces fertiliser.

Further, The fertiliser industry should see an increase in petrol prices under the new pricing scheme, to about Rs580 per MMBtu for feedstock uses. According to the sources, the price of petrol will increase for the industry that produces fertiliser by Rs278 per MMBTu, bringing the total cost to Rs1,580 per MMBTu.

However, The International Monetary Fund (IMF) bailout negotiations for the second tranche are most likely to take place in the final week of October.