By Staff Reporter
ISLAMABAD: Pakistan will raise natural gas prices for industrial users and power plants by 10% starting next month, after approving the measure on Friday in line with International Monetary Fund reforms, while keeping household rates unchanged.
The Economic Coordination Committee (ECC) of the Cabinet, chaired by Finance Minister Muhammad Aurangzeb, made the decision to ensure cost recovery and rationalize tariffs under Pakistan’s ongoing loan program with the IMF.
The price hike, effective from July, targets bulk consumers and gas-fired power plants, aligning with structural benchmarks mandated by the IMF and regulatory obligations under the Oil and Gas Regulatory Authority (OGRA) Ordinance.
“To protect household consumers, gas prices will remain unchanged, with only fixed charges revised,” the Finance Division said in a statement released after the meeting. “However, prices for bulk consumers, industrial units and power plants will be increased by an average of 10 percent.”
The revised pricing structure, submitted by the Petroleum Division, also supports a shift from cross-subsidies to direct, targeted assistance for low-income consumers, a key plank of Pakistan’s economic stabilization efforts.
In a separate move, the ECC approved a Rs15.8 billion supplementary grant for the Ministry of Defense. The funding addresses a shortfall in salaries, allowances, and pending dues, including disbursements under the prime minister’s compensation package for martyrs of the recent Pakistan-India war fought last month. The allocation highlights the fiscal pressures Pakistan faces amid heightened security concerns.
The committee also greenlit a risk coverage scheme for small farmers and underserved regions, with an in-principle approval for a launch by August 14. The program aims to draw 750,000 new borrowers into the formal credit system and unlock a Rs300 billion agricultural loan portfolio over three years, from FY2026 to FY2028.
The Finance Division pegged the total budgetary support at Rs37.5 billion, covering risk coverage and bank operating costs, to be disbursed between FY2027 and FY2031. The government directed relevant ministries to build in additional safeguards before the rollout, signaling a cautious approach to bolstering rural lending.
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