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 PM to attend World Economic Forum’s annual meeting in Switzerland next month
- The WEF meeting, scheduled to be held in Davos on Jan. 19-23, will focus on global challenges, public-private dialogue and cooperation
- Government, business, civil society and academia leaders will engage in forward-looking discussions to address these issues, set priorities
ISLAMABAD: Pakistan Prime Minister Shehbaz Sharif will travel to Switzerland next month to attend the 56th annual meeting of the World Economic Forum (WEF), Pakistani state media reported on Monday.
The WEF annual meeting, themed as ‘A Spirit of Dialogue,’ will be held from Jan. 19 to Jan. 23 in Davos, where world leaders from government, business, civil society and academia will engage in forward-looking discussions to address global issues and set priorities.
Prime Minister Sharif is expected to interact with global leaders and investors on economic challenges, regional and international issues and various opportunities for cooperation.
On Monday, Deputy PM Ishaq Dar presided over a meeting in Islamabad to oversee preparations for Sharif’s upcoming visit to Switzerland to attend the WEF meeting, the Radio Pakistan broadcaster reported.
“Dar instructed to maximize the engagements with the incoming Heads of States, Governments and senior leadership of economic, business and financial institutions,” the report read.
The WEF meeting program will be structured around key global challenges where public-private dialogue and cooperation, involving all stakeholders, is necessary for progress, according to the WEF website.
In addressing these challenges, growth, resilience and innovation will serve as cross-cutting imperatives, guiding how leaders engage with today’s complexity and pursue tomorrow’s opportunities.
Pakistani foreign ministry officials briefed the deputy PM about preparations for the WEF meeting, according to Radio Pakistan. The participants of Monday’s meeting in Islamabad discussed in detail the bilateral component and media engagements during the visit.
“He [Dar] further stressed that opportunities be explored to foster collaboration with private sector business entities,” the state broadcaster said.
