October 04, 2023 (MLN): As the International Monetary Fund (IMF) review approaches, the delay in gas price decision has become the burning question.
Despite this impending review, the government has not yet disclosed any details regarding the gas price adjustments, which are essential to meet the IMF's conditions and address the escalating circular debt issues within the power sector.
Yesterday, all eyes were on the Economic Coordination Committee (ECC)’s decision pertaining to the gas sector, however post-meeting press release revealed that the same decision has been redirected to another committee.
It seems that the government is still thinking over the idea of implementing a gas price hike.
However, this delay can offend Pakistan’s last resort and obviously worsen the fiscal deficit, which is already strained by low tax revenues and high expenditures.
It has been around 20 days since the Caretaker Prime Minister Anwaarul Haq Kakar stated that the Cabinet Division would soon unveil its decision on the matter.
This was just a week after Muhammad Ali, Caretaker Minister for Energy and Power stated that it is deemed necessary to increase gas prices across the board as a vital step towards addressing the crisis, given the pressing concerns regarding the circular debt.
One should not forget that the International Monetary Fund (IMF) came to the rescue at the time when the cash-strapped nation was on the brink of default.
While $1.2 billion has already been disbursed, the remaining amount is phased over the program's duration, subject to two quarterly reviews, with the next review in November 2023.
