A huge blow to the populace sick of inflation was delivered on Monday when the government finally approved a significant raise in gas tariffs.
The cabinet's Economic Coordination Committee (ECC), presided over by Finance Minister Dr Shamshad Akhtar, approved raising the gas tariff up to 193% effective November 1, 2023.
The development occurs ahead of the International Monetary Fund (IMF) review scheduled to be held later this month, for which Pakistan was asked to reduce the rapidly increasing circular debt in the energy sector.
The fixed monthly charges for protected customers were increased from Rs. 10 to Rs. 400 in the authorized summary, while those for non-protected users were increased from Rs. 460 to Rs. 1000 and for higher slabs up to Rs. 2000.
The local gas tax has been increased by the government to 173% for domestic non-protected consumers, 136.4% for commercial users, 86.4% for exporters, and 117% for non-exporting businesses.
Exporters will profit the most since their tariff will increase by 86% starting on November 1, 2023.
The average tariff was supposed to increase as of October 1, 2023; however, the ECC approved it with effect from November 2023.
The Ministry of Finance reports that many agenda items and summaries from other ministries were discussed during the meeting.
A description of the steps taken to satisfy the urea requirements for the Rabi season 2023–24 was provided by the Ministry of Industries and Production. After giving careful consideration to the request, the ECC decided to sanction the immediate import of 200,000 tonnes of urea fertilizers.
It was also instructed to guarantee a continuous gas supply for the fertilizer sector. Additionally, it was agreed that the provinces would be expected to take greater initiative in order to cover the expense of imports.
The Earthquake Reconstruction and Rehabilitation Authority (ERRA) presented a summary for approval of the Technical Supplementary Grant of Rs. 484 million to cover critical costs for the pay and benefits of 415 contract and project employees starting in July 2023. This summary was discussed during the meeting.
The Ministry of Planning, Development, and Special Initiatives was instructed by the ECC to find savings in order to pay the wages of the ERRA staff.
The conference also took into consideration and approved a summary provided by the Ministry of Finance regarding the formation of the National Credit Guarantee Company Limited to assist small and medium-sized businesses (SMEs) in improving their credit.