According to reports, the $3 billion programme approved under SBA with the IMF at the staff level will not be possible without this increase in energy prices.
For the fiscal year 2023–2024, Pakistan is anticipated to raise electricity base tariffs by Rs3.50 to over Rs4 per unit and gas sale prices by 45–50%. These modifications must be communicated prior to the July 12 meeting of the Executive Board of the International Monetary Fund (IMF).
The staff-level agreement with Pakistan, which provides a $3 billion stand-by arrangement (SBA) to help the cash-strapped nation, is scheduled to be approved at an executive board meeting of the International Monetary Fund (IMF) on July 12.
According to reports, the $3 billion programme approved under the Stand-By Arrangement (SBA) with the IMF at the staff level will not be possible without this increase in energy prices.
Sui Northern Gas Pipeline Limited (SNGPL) customers had previously been informed by Ogra of a 50% price increase (Rs415.11 per MMBTU), bringing the subscribed gas price to Rs1,238.68 per MMBTU.
Additionally, for the fiscal year 2023–2024, the regulator increased the price of gas for Sui Southern Gas Company Limited (SSGCL) customers by 45 percent (to Rs417.23 per MMBTU). The official announcement of the increase in gas prices for the upcoming fiscal year has not yet been made by the government.
Sui Southern has a shortfall of Rs97.388 billion, while the SNGPL has a cumulative shortfall of Rs560.378 billion up to FY23. The increase in gas sale prices based on various categories beginning on January 1, 2023, had already been announced by the federal government.
The current policy subsidises gas prices for low-end consumers by high-end consumers. Beginning on July 1, 2023, it is likely that the government will continue this policy, with high-end consumers covering the cost of gas for low-end consumers.
According to the media, there is currently over Rs4,300 billion worth of circular debt that is weighing down the entire energy sector. The oil and gas industry is responsible for Rs. 1,700 billion of this debt, while the power industry is responsible for Rs. 2,600 billion.
The base tariff must be raised for the fiscal year 2023–2024 in order for Pakistan to make its energy sector viable and sustainable, according to the IMF.