ISLAMABAD: Pakistan on Monday increased natural gas prices by up to 20 percent, Petroleum Minister Chaudhry Mohammad Sarwar said, in effect slashing consumer subsidies that were a fiscal drag on the government’s budget.
Sarwar said the move would help ease part of the 152 billion rupee ($1.24 billion) deficit for state-owned Sui Northern and Sui Southern, the two main suppliers of natural gas that are bleeding cash and subsidising consumers and industries.
The decision was taken by the Economic Coordination Committee chaired by new Prime Minister Imran Khan, who has vowed radical economic reforms.
“It was a tough decision for us to take,” Sarwar said, adding that the price hike was “10 to 20 percent,” depending on how much gas the user consumed.
The new measures would inject “58 billion rupees to stabilize the two companies,” Sarwar added.
The price hike is some way off the 46 percent rise recommended by Pakistan’s regulator, which is roughly the increase needed if the gas providers were to break even and de facto subsidies be terminated.
Such price rises are politically sensitive in Pakistan, which has enjoyed decades of cheap gas due to its natural resources.
However, over the past decade those gas reserves have not been enough and Pakistan experienced a number of shortages until it began importing liquefied natural gas (LNG), which is more expensive than domestic gas.
Sarwar said Pakistani consumers would be given relief via a reduction in most taxes on LNG, except a 10 percent sales tax.
Pakistan is struggling to avert a currency crisis that could force it to seek a bailout from the International Monetary Fund. The country’s current-account deficit has ballooned in recent years, while the fiscal deficit has shot up to 6.8 percent of the economy in the year that ended June 30.
Pakistan raises gas prices to trim subsidies amid budget woes
Pakistan raises gas prices to trim subsidies amid budget woes
- Petroleum Minister says the move would help ease part of the 152 billion rupee ($1.24 billion) deficit for state-owned Sui Northern and Sui Southern, the two main suppliers of natural gas that are bleeding cash and subsidising consumers and industries
- The decision was taken by the Economic Coordination Committee chaired by new Prime Minister Imran Khan
Pakistan’s president defends ongoing strikes in Afghanistan, urges Kabul to dismantle militants
- Afghanistan on Thursday launched attacks in retaliation for Pakistani airstrikes the previous Sunday
- Pakistan’s military says it is only targeting Afghan military installations to avoid civilian casualties
ISLAMABAD: Pakistan’s president on Monday defended his country’s ongoing military strikes in neighboring Afghanistan, saying Islamabad tried all forms of diplomacy before targeting militants operating from Afghan territory, and called on the Taliban government in Kabul to disarm groups responsible for attacks in Pakistan.
Pakistan earlier said it is in “open war” with Afghanistan, alarming the international community. The border area remains a stronghold for militant organizations including Al-Qaeda and the Daesh (Islamic State) group.
“(The Afghan Taliban) must choose to dismantle the terror groups that survive on conflict and its war economy,” Asif Ali Zardari said during a speech to lawmakers, adding that “no state accepts serial attacks on its soil.”
Afghanistan on Thursday launched attacks in retaliation for Pakistani airstrikes the previous Sunday. Since then, Pakistan has carried out operations along the border, with Information Minister Attaullah Tarar claiming the killing of 435 Afghan forces and the capture of 31 Afghan positions.
Kabul has denied such claims.
In Afghanistan, the deputy government spokesman Hamdullah Fitrat said Pakistan’s military fired mortar shells at a refugee camp in eastern Kunar province, killing three children and injuring three others.
Afghanistan’s defense ministry said Afghan forces carried out strikes targeting a Pakistani military facility near Paktia province, causing “substantial losses and heavy casualties.”
Pakistan’s military did not respond to questions. It has said Pakistan is only targeting Afghan military installations to avoid civilian casualties.
Pakistan has witnessed a surge of violence in recent months and blames it on the outlawed Pakistani Taliban, known as Tehreek-e-Taliban Pakistan or TTP. It operates both inside Pakistan and from Afghan territory.
Islamabad accuses Afghanistan’s Taliban government of providing safe havens for the TTP, which Kabul denies.
The latest cross-border fighting ended a ceasefire brokered by Qatar and Turkiye in October. The two sides failed to reach a permanent agreement during talks in Istanbul.
Zardari reiterated Pakistan’s call for talks, saying, “We have never walked away from dialogue.”
The Pakistani leader again accused Afghanistan of acting as a proxy for India by sheltering militant groups.
“Stop being used by another country as a battlefield for their ambitions,” he said.
Zardari cited a recent report from the United Nations Security Council’s monitoring team that described the presence of militant groups in Afghanistan as an extra-regional threat.
