ISLAMABAD: Pakistan is likely to ‘revise’ gas tariff from the ongoing month of October, for the fertilizer sector on the International Monetary Fund’s (IMF) demand.
The decision was taken by the caretaker government after the international lender ‘denied’ the provision of gas to the fertilizer sector at the subsidized rate, the sources said. This adjustment is scheduled to coincide with the beginning of a review with the International Monetary Fund (IMF) under a $3 billion Structural Adjustment Program (SAP) loan.
Under the new pricing model, the fertilizer sector is expected to experience an increase in gas tariffs to approximately Rs580 per MMBtu for feedstock purposes. The gas will be made costlier for fertilizer fertilizer-producing sector by Rs278 per MMBTu, the sources said and added that the new rate of gas will be Rs1,580 MMBTu.
The initiative to revise gas prices across multiple sectors, including fertilizer production, is a broader strategy aimed at tackling the substantial circular debt in energy sector of Pakistan.
It may be noted that the talks for the second tranche of the International Monetary Fund (IMF) bailout will likely be held in the last week of October. Earlier, A mission of the International Monetary Fund (IMF) will arrive in Pakistan in the last week of October to review the country’s economic performance in the first three months of the current fiscal year. According to sources from the Ministry of Finance, discussions will also take place between the caretaker government and the mission regarding reforms in various sectors, including taxes and energy. –Agencies
