The federal government has proposed a substantial increase in gas prices for the next fiscal year, affecting various sectors including domestic users, fertilizer plants, CNG stations, and cement factories. This plan has been shared with the International Monetary Fund (IMF), according to sources from ProPakistani.
The economic team has presented a comprehensive circular debt management plan to the IMF. The initial proposal suggests raising the gas rates by Rs. 100-400 for both protected and non-protected consumers. Additionally, the plan includes proposals for tariff adjustments to manage the circular debt in the gas sector.
The government has assured the IMF that gas rates for commercial tandoors will not be increased. Discussions between the IMF’s economic team and the government have focused on tariffs, revolving credit, and reforms for the gas sector.
A dividend scheme was also discussed as part of the debt reduction strategy, according to sources.
Both parties have agreed to share data promptly on recovery, reforms, and tariffs with the IMF to ensure smooth implementation of the proposed changes.
Last week, the federal government informed the IMF that it expects the circular debt to increase by Rs. 150 billion, reaching Rs. 2.5 trillion by the end of the current fiscal year. This significant rise in power sector debt violates the targets set by the lender last year, which aimed to keep the debt controlled at Rs. 2.31 trillion.
The IMF had requested a detailed plan from the Power Division to prevent further increases in the debt. This plan, which includes proposals for tariff adjustments to manage the gas sector circular debt, has been shared with the IMF today.
