Finance minister announces gas price hike in January 2024

By Shahzad Paracha

ISLAMABAD: Caretaker Finance Minister Dr Shamshad Akhtar has said that the government will increase gas prices again in January 2024.

Briefing the media in Islamabad, she said that the government will increase the gas prices again in January 2024 to curtail the circular debt.

She said that “our first priority is to achieve a tax target of Rs9415 billion by the Federal Board of Revenue (FBR) and in case, if there is any shortfall in the tax revenue then the government will impose additional measures.

Akhtar further said that the International Monetary Fund has been informed about the revision of tariffs in the energy sector and the decision to impose additional taxes on various sectors including real estate while taxes on retailers is yet to be decided.

The finance minister also said that the government has postponed the decision to issue a 1$.5 billion dollar international bond.

“We will float bonds when the rating improves after the agreement with the IMF,” she said.

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She said that “we are expecting $2 billion in loans from the World Bank in the current fiscal year, while Asian Development Bank, Islamic Development Bank and Asian Infrastructure Bank are also likely to lend $1 billion dollars.”

Akhtar said that there is much room for further improvement in Pakistan’s economy.

She clarified that it was important for Pakistan to remain in the IMF programme, and “at this stage, the completion of the $3 billion programme is a priority, and if there is time, a new programme will also be discussed with the IMF.”

She also said that it is important to stay with the IMF to increase exports and the creation of new resources.

The federal government is also planning to obtain commercial financing from various countries as well as international organizations, she said.

Dr Shamshad Akhtar said that an agreement has been reached with the IMF and its Executive Board will also approve it in the coming days.

Pakistan will get about $700 million after the approval of the staff-level agreement (SLA) from the IMF board and after which the volume of payments under the IMF programme will reach $1.9 billion, she explained.

She said that Pakistan had entered into an SLA with the IMF in July 2023 to receive $3 billion. After this agreement, the business climate as well as investors’ confidence have improved in the last few months, she said.

The caretaker finance minister said that “we also got the support of international partners due to the reforms made under the SLA.”

“We have steadfastly implemented the budget for the fiscal year 2023-2024 under which energy prices increased. She said that due to better management, Pakistan has been able to reduce fiscal and external pressures and inflation has also come down in the last few months.

The IMF also expects that inflation to further decrease in the coming months, she said.

Along with these positive changes, she said that “we also realize that Pakistan is exposed to external threats, including regional tensions, rising commodity prices and tough global conditions.”

She said that “we have to continue our efforts to stabilize the micro economy and achieve growth.”

Shamshad Akhtar said that “our first priority is to continue our efforts to reduce the external debt through financial stability but we should also keep in mind development priorities.”

Clarifying her statement with regard to a $7 billion new loan from the IMF, she said that “I mentioned $7 billion Reko Diq assets, not a new loan from the IMF.”