After the hike in Petrol Prices, Oil and Gas Regulatory Authority (OGRA) has jacked up the gas prices by 113%.
The notification issued by OGRA states that gas prices were hiked from 16% to 113% for different sectors including domestic consumers. Domestic consumers were divided into 12 categories of protected and unprotected consumers.
Also Read: IMF Conditions: Govt Increases Petrol Prices by 22 Rupees Per Liter
On 13th February 2023, the Economic Coordination Committee (ECC) of the federal cabinet approved the summary for hiking the gas price by 112% for domestic consumers.
The federal government decided to put an additional financial burden of over Rs310 billion on gas consumers in order to revive IMF Program. The gas price will be hiked by 112% for domestic consumers.
It was learned that there will be 10 slabs of the gas pricing for domestic consumers. Rupees 500 fixed charges were imposed on unprotected residential consumers. Moreover, fixed charges of Rs 50 were also imposed on protected residential consumers.
The new prices for the export sector were increased up to 34% and fixed at Rs1,100 per MMBtu, a 13.9% hike for common industries and fixed at Rs1,200 per MMBtu, 32% hike for the CNG sector and fixed at Rs1,805 per MMBtu and 15% increase for cement companies and fixed at Rs1,500 per MMBtu.
The committee approved gas price revision for domestic, commercial and power sectors for six months from January to June 2023.
According to a press statement issued by the finance ministry. the Ministry of Energy (Petroleum Division) had tabled a summary on Natural Gas Sale Pricing for FY 2022-23 and presented tariff proposals for all consumer categories in accordance with the Review of Estimated Revenue Requirement (RERR) for the fiscal year 2022-23.
‘Mini-Budget’
Earlier Federal Finance Minister Ishaq Dar introduced the Finance Bill (Supplementary) the “mini-budget” in the National Assembly in order to meet IMF Conditions for the approval of the loan program needed to avoid a default.
While addressing the Parliament, the finance minister compared the performance of the previous PML-N and PTI governments.
The finance minister also announces to increase General Sales Tax GST rate from 17 to 18% and increasing the Federal Excise Duty (FED) on cigarettes and Tobacco in order to fetch an additional Rs115 billion out of Rs170 billion agreed to by Pakistan in line with the IMF conditions.
Mini-budget proposals
- Govt has increased GST on luxury items from 17% to 25%
- Increase in federal excise duty on cigarettes and fizzy drinks.
- Increase in federal excise duty on cement
- GST has been increased from 17pc to 18pc
- Benazir Income Support Programme (BISP) handouts increased to Rs400bn from Rs360bn
- FDE on business and first-class air tickets to now be Rs20,000 or 50% — whichever is higher
- GST is to not be imposed on essential goods.
Credible Sources at the Ministry of Finance told that they expect the bill to be ascended by Thursday morning, which will pave the way not only for the IMF monies but funds from multi-laterals and bilateral.
According to the latest details, A session of the Senate has also been summoned to move the bill to the upper house. After the passage of the finance bill from both houses, the bill will be then sent to President Arif Alvi for approval.
IMF Virtual Talks
Virtual talks between the International Monetary Fund (IMF) and Pakistan for the completion of the ninth review of the $7 billion loan program began a day earlier before presenting Finance Bill.
The officials of the finance ministry would brief the IMF about the implementation of the conditions set by them for the revival of the loan program. it was reported that the International Monetary Fund (IMF) and Pakistan moved closer to the revival of the $7 billion Extended Fund Facility (EFF) as the IMF responded to the Memorandum of Economic and Financial Policies (MEFP) draft and soon the revival of $7 billion Extended Fund Facility (EFF) will be completed.
