Pakistan approves 10 percent gas price hike for industry, power plants under IMF conditions
KARACHI: Pakistan on Friday approved a 10 percent increase in natural gas prices for industrial users and power plants starting next month, in line with reforms mandated by the International Monetary Fund (IMF) to ensure cost recovery and tariff rationalization, an official statement said.
The decision was taken by the Economic Coordination Committee (ECC) of the Cabinet, chaired by Finance Minister Muhammad Aurangzeb.
While prices for bulk consumers and gas-fired power plants will rise, household consumers will be shielded from the increase.
'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 statement said the revised pricing structure, submitted by the Petroleum Division, complies with regulatory obligations under the OGRA Ordinance and meets structural benchmarks under Pakistan's ongoing loan program with the IMF.
It also supports a shift from cross-subsidies to direct, targeted assistance for low-income consumers.
DEFENSE GRANT
The ECC also approved a Rs15.8 billion ($55.3 million) supplementary grant for the Ministry of Defense to cover a shortfall in salaries, allowances and pending dues.
The funding includes disbursements under the prime minister's compensation package for martyrs of the recent Pakistan-India war fought last month.
In a separate decision, the committee gave in-principle approval to launch a risk coverage scheme for small farmers and underserved regions by August 14.
The program is expected to bring 750,000 new borrowers into the formal credit system and unlock a Rs300 billion ($1.05 billion) agricultural loan portfolio over three years (FY2026-28).
The statement said the total budgetary support for the scheme, covering risk coverage and bank operating costs, is estimated at Rs37.5 billion ($131.25 million), to be disbursed between FY2027 and FY2031.
The government has directed relevant ministries to incorporate additional safeguards before the official rollout.
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