Gas prices in Pakistan are set to increase by a significant amount, with a potential rise of up to 193% in the coming month. The decision to raise gas prices is part of an agreement with the International Monetary Fund (IMF) to secure an economic review and receive a $700 million tranche of funding.
According to reports, a proposal to increase gas prices will be discussed in a government meeting. The plan suggests a 172% hike for domestic consumers and a whopping 193% increase for other categories.
The proposal also includes a significant rise in fixed monthly charges for some customers, with a potential jump from Rs10 to Rs400. Export industries may see their gas tariff increase from Rs950 to Rs2,050, while non-export industries might experience an increase from Rs1,400 to Rs2,600.
Additionally, the price of CNG is expected to go up from Rs2,595 per metric million British thermal units (mmbtu) to Rs4,400 per mmbtu. However, there are no proposed changes to gas tariffs for power plants and tandoors.
The government has pledged to collect around Rs786 billion from gas consumers this year as part of its agreement with the IMF. This is higher than the 45% increase in gas rates set by the Oil and Gas Regulatory Authority (Ogra) for June, which aimed to generate an estimated revenue of Rs666 billion.
Once the economic review is completed successfully, Pakistan anticipates receiving a $700 million installment from the IMF, pending board approval.