ISLAMABAD: As the people in Pakistan are already fed up with the record-high and sustained inflation, the International Monetary Fund (IMF) has conveyed its annoyance over not increasing the gas prices – a move that will only worsen the existing cost-of-living crisis.
According to sources, the IMF says not raising the gas tariffs from July 1 is a violation of the $3 billion agreement signed by Pakistan after the expiry of the previous programme on June 30.
The current nine-month deal, which will end on March 31 next year, carries strict conditions including increase in fuel prices, gas and power tariffs, and let the market decide the dollar exchange rate without any government or State Bank of Pakistan intervention.
As a result, the people are experiencing a sustained inflation rate which is increasing further amid the rising prices and rupee depreciation. However, the government crackdown on money markets has raised some hope that the inflation might be controlled in the longer-run.
The IMF has told Islamabad, the sources in finance ministry say, that the two gas distribution companies – Sui Northern and Sui Southern – have faced a Rs46 billion loss because the tariffs were not modified with effect from July 1.
And the IMF hasn’t stopped there as it suggested Rs46bn should also be recovered from gas consumers, meaning the price increase must be effective from July 1, thus forcing the inflation-hit people to pay massive bills in the coming months.
On their part, the sources say the finance ministry officials informed the IMF that Caretaker Finance Minister Shamshad Akhtar will return to Pakistan from Beijing Thursday (today) after which progress could be made on the matter.
The issue of gas tariff is of great significance as the IMF is set for the second review of the current programme and the release of the next tranche depends upon Pakistan meeting its conditions.
