ISLAMABAD: Pakistan’s Oil and Gas Regulatory Authority (OGRA) has okayed up to 50 percent increase in gas prices as it calculated an estimated revenue requirement of Rs697.4 billion ($2.4 billion) to be collected from consumers this fiscal year, Pakistani media reported on Saturday, amid record inflation and economic meltdown in the South Asian country. 

The South Asian nation has been witnessing an increase in the inflation rate since late last year when the government took prior actions to comply with the conditions set by the International Monetary Fund (IMF) to revive a stalled $7 billion bailout program, stalled since November. 

Pakistan reported 38 percent inflation in May on the back of rising food and energy prices and a massive currency devaluation. The Pakistani rupee has devalued by around 30 percent since last June and played a major role in piling up the inflationary pressure. 

Gas consumers in the country are likely to witness a potential 50 percent increase in prices starting from July as OGRA concluded its determinations for two struggling state-run gas distributors and submitted them to the government, The News English-language daily reported. 

“The Sui Northern Gas Pipeline Limited (SNGPL), responsible for gas supply to consumers in Punjab and Khyber-Pakhtunkhwa (KP), will collect Rs358.4 billion,” the report read. 

“The Sui Southern Gas Company (SSGC), which supplies gas to consumers in Sindh and Balochistan, will collect Rs339 billion.” 

OGRA determined Rs1,238.68 per 1 million British Thermal Unit (mmBtu) to be the average prescribed price for SNGPL, reflecting a 50 percent increase or Rs415.11 as compared to the existing price, according to the report. 

Similarly, the average prescribed price for SSGC was set at Rs1,350.68/mmBtu, representing a 45 percent increase of Rs417.23. 

The regulator has proposed eliminating the distinction between protected and unprotected slabs for gas consumers and setting the price at 1238.68/mmBtu. 

“This change will result in a significant increase in gas prices for protected low-slab consumers,” the report read further. 

“However, two highly gas-consuming slabs will benefit from the new pricing as they were previously paying up to Rs3,100/mmBtu.” 

Interestingly, while gas will become more expensive for zero-rated consumers, gas-filling stations, cement and fertilizer plants, power stations, and independent power producers (IPPs) will experience a reduction in gas prices, according to the report. However, the feedstock gas prices for the fertilizer sector will more than double. 

The regulator has now suggested a uniform prescribed price of Rs1,238.68/mmBtu for all these categories. 

The increase in gas prices is expected to further burden the masses reeling from record inflation in the country, with many saying they have been forced to cut their kitchen spending and focus only on most essential items. 

As Pakistan’s Finance Minister Ishaq Dar prepares to present budget for the next fiscal year, financial experts have urged the government to take steps to mitigate the suffering of low-income groups. 
 

KARACHI: New Future Consumer International General Trading (NFCIGT), a Dubai-based multinational company, has acquired a Pakistani home and personal care product manufacturer, Zulfiqar Industries Limited (ZIL), by injecting around $6 million foreign direct investment (FDI) in Pakistan, officials and a corporate finance adviser familiar with the deal said on Friday. 

The NFCIGT is an emerging global fast-moving consumer goods (FMCG) player with business development initiatives in the Gulf countries, Russia, and now in Pakistan with local partners. The company has acquired over 5 million, or 84.84 percent, shares of the ZIL, according to a stock filing on Thursday. 

The ZIL, incorporated as a private limited company in 1960, manufactures and sells home and personal care products, including the famous Capri Soap, in Pakistan. 

Dr. Cobus Van Rooijen, the founder and managing director of the NFCIGT, said he believed in the long-term growth potential of Pakistan despite challenges. 

“Despite the challenging times, we firmly believe in the long-term growth potential of the country,” Rooijen said in a statement on Friday. “We look forward to leveraging our global experience and resources to drive innovation, create employment opportunities, and contribute to Pakistan’s economic growth.” 

The NFCIGT chief said his company has prioritized Pakistan as part of its global business development strategy in the FMCG category. 

“ZIL Limited has Capri as a fantastic heritage brand, which provides opportunities to expand into other personal care premium categories,” Rooijen said. “We have identified Pakistan as major investment opportunity based on demographics and anticipated consumption per capita growth in key consumer categories.” 

Pakistan’s economic landscape has faced numerous challenges, including the global COVID-19 pandemic, and associated economic repercussions, followed by global commodity super-cycle given the Russia-Ukraine war, and the internal political and economic challenges. 

However, the new investor remains optimistic about the long-term potential of the Pakistani market and the investment demonstrates their commitment to contributing to Pakistan’s economic development, creating job opportunities, and fostering innovation in the FMCG sector, according to the statement. 

The share price of ZIL has increased by 86.6 percent from Rs181.67 per share to Rs339 since January 2023, according to the data available at Pakistan Stock Exchange website. 

Alpha Beta Core, a Karachi-based financial advisory and investment banking firm, facilitated the acquisition that marks a significant milestone in the global expansion strategy of investors. 

“The acquisition of a Pakistani company by a multinational FMCG player signifies an important milestone at a time when the country is facing economic crisis and needs much needed foreign exchange inflows,” Khurram Schehzad, CEO of Alpha Beta Core, told Arab News. 

Schehzad said the acquisition highlights his team’s commitment to delivering exceptional financial advisory services and ability to navigate complex cross-border transactions. 

“We are confident that our clients’ investment in the Pakistani market will yield substantial returns and create mutually beneficial partnerships,” he added. 

Schehzad said the NFCIGT aims to contribute to the growth and development of the region and countries in which it operates, including Pakistan, . 

The NFCIGT chief said he would continue to look for complementary investment opportunities with local partners. 

“Our ambitions are to extend to multiple categories in the current countries followed by market entries in other targeted geographies, including Africa and CIS (Commonwealth of Independent States),” he said.