ISLAMABAD: The IMF has mandated a 100% increase in gas tariffs for protected customers, and the government is also set to address the discrepancy in gas tariffs between the export and non-export sectors.

Efforts are underway to consider raising gas prices for 57% of protected residential customers nationwide starting from January 2024. The gas system is currently grappling with a Rs 100 billion loss attributed to protected gas customers.

In the latest gas tariff notification effective from November 1, 2023, protected gas consumers experienced no tariff hike except for an increase in meter charges from Rs 10 to Rs 400 per month.

Starting January 2024, authorities aim to implement a 100% increase in gas prices for protected customers, presently at the lowest level compared to other domestic customer categories, to address revenue issues.

A subsequent hike for protected customers is slated for July 1, 2024, aiming to offset the remaining Rs 50 billion loss. Additionally, the government plans to eliminate the gas price disparity between the export and non-export industries from January 2024 under IMF directives, generating an additional revenue of Rs 20 to 30 billion.

The IMF also calls for the cessation of Rs 27 billion in cross-subsidies on fertilizer joints (Engro Fertilizer in the Sui Northern system and Fuji Fertilizer Bin Qasim Limited in the Sui Southern system).

According to senior officials from the Ministry of Energy, the government, following IMF guidelines, will treat the export and non-export sectors as a unified industrial sector, ensuring uniform tariffs. Captive power plants linked to the national power grid will not receive gas supply, while those unconnected will be provided with RLNG instead of local gas.

The government is actively working towards a Rs 100 per mmbtu increase in gas tariffs for the export sector, aligning their tariffs with those of the non-export industry.

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