IMF not happy over failure to notify revised gas tariff

ISLAMABAD: The International Monetary Fund (IMF) has shown its dismay at the government’s failure to notify the revised gas price every six months – July 1 and January 1 – in a financial year.

The Fund asked the government to enforce the increase in gas tariff biannually to avoid accumulation in the gas circular debt. “The visiting IMF mission flagged the issue of not increasing the gas tariff on biannual basis by government,” a senior official who was part of the meeting with the Fund told The News. “The Fund argued failure to hike the gas tariff biannually for the last 10 years since 2013 caused a massive buildup in the gas circular debt.”

Government functionaries told the Fund the caretaker government had notified the unprecedented hike in gas tariff from November 1. The increase will yield Rs980 billion revenue in just eight months. So, the government may not be required to hike the tariff due from January 2024 when the regulator comes up with determination to be effective from January next calendar year.

The Fund has been told the PDM government had delayed the increase in gas tariff because of political considerations, and the caretaker regime has to come up with a massive increase, which will end the process of further increase in the circular debt in FY24 that now stands at Rs2,900 billion.

The IMF mission Tuesday also held a meeting with Ogra officials and asked the regulator why it has not notified the gas tariffs after lapse of 40 days since its determination. The Fund was told the regulator cannot do it on its own, as under Section 21 of the law, it has to seek guidelines from the government.