The government on Monday approved an increase of up to 113% in the natural gas prices to recover Rs310 billion from the majority of consumers in six months, putting a minimum of Rs736 billion additional burden on the citizens in the form of taxes and energy costs to revive the International Monetary Fund (IMF) programme.
Although the government started implementing one after another condition of the IMF to revive the programme, it had not yet shown a willingness to reduce the cabinet size and impose taxes on traders and the stock market.
The Economic Coordination Committee of the Cabinet (ECC) took the decision that passed on the maximum burden of 113% to domestic consumers who had monthly consumption of above four cubic metres.
The prices for domestic consumers had been increased in the range of 8.5% to 113% besides “optimising” the previous slab benefit.
The details showed that for the bulk, commercial, power producers, fertiliser plants, cement, exporters, general industry and CNG stations, the gas prices had increased from 10.4% to 105%.
The increase was needed to stop the gas-supplying companies from bankruptcy, which had already sustained an Rs577 billion revenue shortfall since 2013.
The Petroleum Division tabled a summary on Natural Gas Sale Pricing FY 2022-23 and presented tariff proposals for all categories of consumers following the Revised Estimated Revenue Requirements (RERR) for the fiscal year 2022-23, according to the Ministry of Finance.
“The ECC, after a detailed discussion, approved a gas price revision proposal for domestic, commercial and power sectors for six months – January to June 2023,” according to the statement.
With the new approval, the government had met two prior actions of increasing the electricity and gas prices, which were set by the IMF along with other conditions, for reaching a staff-level agreement.
The details showed that the gas consumers would pay an extra Rs310 billion in six months.
The government had already increased the electricity prices by Rs3.30 to Rs15.52 per unit to recover Rs237 billion more by June. Another burden of Rs189 billion would be passed on in the shape of an increase in taxes by June 2023.
