https://ift.tt/tGYhwlP In an effort to secure a $700 million tranche in the upcoming International Monetary Fund (IMF) review under the $3 billion standby loan agreement, the caretaker government has taken steps to meet prior conditions including a proposal to increase gas tariffs for various sectors by up to 193 per cent in the next month, Express News reported. The proposal is expected to be presented in the upcoming Economic Coordination Committee (ECC) meeting scheduled for Monday. According to sources, the Petroleum Division's proposal outlines a substantial 193 per cent increase in gas tariffs and a 172 per cent hike in gas prices for domestic consumers. Additionally, it suggests a 193 per cent increase in gas prices for other consumer categories and a notable adjustment in fixed monthly charges for protected consumers, rising from Rs10 to Rs400. The proposal also calls for increasing the gas tariff for the CNG sector to Rs4,400 per MMBTU. However, it has been suggested that gas prices for power plants and commercial bread-makers to remain unchanged. Read More: Higher gas prices to harm steel, cement industries Pakistan is on track to secure the IMF’s first economic review under its $3 billion loan programme in November, paving the way for the release of the second tranche of $700 million, despite some missed targets and challenges in implementing promised reforms. A recent report from Topline Research titled ‘Pakistan IMF Loan Review: Funding Requirement, Primary Deficit, Gas Pricing & Monetary Policy’ highlights that while Pakistan has faced obstacles in meeting certain benchmarks, there is a high probability that it will receive the next IMF tranche. Read More: IMF allows leeway on electric bills, raises gas prices by 50% The IMF’s Executive Board may grant a waiver if it believes the programme remains viable, and missed structural benchmarks and indicative targets are assessed in the context of overall programme performance. The State Bank of Pakistan (SBP) governor, in his post monetary policy briefing on September 14, 2023, confirmed that all quantitative performance targets required by the IMF programme related to the SBP, including Net Domestic Assets (NDAs), swaps and net international reserves have been met. Similarly, the finance ministry has expressed its commitment to maintaining fiscal discipline and achieving primary balance targets. Pakistan secured a nine-month Stand-By Arrangement (SBA) from the IMF worth $3 billion in June 2023, marking a significant achievement after the failure to revive the previous $6 billion programme on the same day. The SBA exceeded expectations in terms of both duration and size.
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