The government has given a commitment to the International Monetary Fund (IMF) to increase gas tariff in January 2016 to recover the losses of gas utilities and to charge the cost of imported liquefied natural gas to consumers on a monthly basis.
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In a written statement given to the IMF, Finance Minister Ishaq Dar said that as required under “prior action” for disbursement of $506 million two weeks ago,
The government had partially recovered the losses incurred by gas companies due to delayed price notifications of fiscal year 2014-15, through increased tariff notified and implemented on Aug 31. “The remaining losses will be recuperated in the January 2016 gas price notification,” wrote the minister, adding that the government “will also make any necessary adjustments to notified prices to reflect prices of imported gas so that the cost of this gas will be fully reflected in the tariff on monthly basis”.
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He said the government could not notify increase in gas tariff due in July 2014 and Jan 2015 but it remained committed to a gas price rationalisation plan to encourage new investment, promote efficiency in gas use, ensure there were no fiscal costs from the gas sector and eliminate distortions from the existing gas price structure. He said the government was now gearing up to implement the plan fully.