Minister of State for Petroleum Musadik Malik Tuesday said on that the government will have to increase the price of gas.
In a Senate meeting, he claimed that Pakistani gas prices were currently “unsustainable.”
“Discussion is ongoing to decide the magnitude of the gas price increase,” he stated. The government is unable to offer people additional gas connections at this time.”
The minister’s remarks come as the IMF’s 9th review, which must be passed before the next tranche of cash can be sent to Pakistan, has been on hold since September. With its central bank’s foreign reserves reaching a crucial threshold of less than $4.5 billion, the nation is in a grave economic crisis.
Pakistan’s power regulator has already allowed Sui Northern Gas Pipeline Ltd (SNGPL) and Sui Southern Gas Company (SSGC) to hike rates up to 75%, subject to cabinet approval.
This rise in gas prices, a major source of electricity generation, will increase the cost of production for industries that are likely to pass on the impact to the end consumer. This will add to the already high inflationary pressure, which remains well above 20% for several months and may accelerate the rate of economic slowdown, say experts.
Meanwhile, Pakistan is set to hold bilateral talks with a Russian delegation on Tuesday, for a long-term oil and liquefied natural gas (LNG) trade deal and the construction of the $3 billion Pakistan Stream Gas Pipeline (PSGP) project.
