A new framework for natural gas pricing was agreed by the Cabinet’s Economic Coordination Committee (ECC), although domestic customer tariffs remained unaltered.
Part of the larger economic changes under the International Monetary Fund (IMF) program, the decision was made at a meeting presided over by Finance Minister Muhammad Aurangzeb.
The federal government will now make an announcement on updated gas prices 40 days after the Oil and Gas Regulatory Authority (OGRA) releases its biannual determination, per an official handout.
Official sources revealed that fixed costs for household consumers had been approved for an increase, even though the ECC decided to keep domestic users’ gas rates at their existing levels for the upcoming fiscal year. The magnitude of the increase in fixed charges was not specified.
The committee approved an average 10% rise in gas prices for power plants, industrial facilities, and wholesale consumers. Officials claim that this increase is required to make up for budget deficits in the energy sector.
The ECC established a ten-member steering committee to assess the potential for sugar imports, which was another significant development. The Cabinet Committee on Sugar (CC) will soon hear the committee’s recommendations. The action was taken in response to worries about domestic sugar supplies and the expected volatility of prices in the upcoming months.
A risk coverage plan targeted at small-scale farmers was also approved in principle by the ECC. The program, which is scheduled to begin on August 14, aims to distribute 750,000 new agricultural loans, with a three-year total release of Rs300 billion. According to the Ministry of Finance, the risk coverage mechanism and bank administrative expenses will cost Rs37.5 billion.
A number of technical supplemental grants in important fields were also approved by the ECC. These consist of:
- For the Ministry of Defense, Rs158.4 million
- Rs 2,604 billion has been set aside for loan repayment, both domestically and internationally.
- SUPARCO (Space & Upper Atmosphere Research Commission) would receive Rs 5.5 billion.
In the midst of the nation’s continuing fiscal consolidation campaign, officials described the choices as part of an effort to increase industry efficiency and streamline financial planning.
