According to sources, the International Monetary Fund (IMF) has proposed a significant gas price hike across various sectors, including domestic consumers, fertilizer production, CNG, and cement, starting in August.
The proposed increase ranges from Rs 100 to Rs 400 per month for both protected and non-protected consumers. However, the IMF has recommended that there be no gas price hike for commercial users, including tandoors.
In an effort to address the circular debt within the gas sector, Pakistani authorities have presented three strategic plans to the IMF. Additionally, discussions have included a dividend scheme as a potential solution. The IMF has also suggested a gas price hike specifically for fertilizer plants.
Moreover, an agreement has been reached between Pakistan and the IMF to share data related to subsidies, reforms, and tariffs in a timely manner to ensure transparency and progress.
Previously, the IMF mission had demanded that the Pakistani authorities impose a tax on monthly pensions exceeding Rs 100,000. In an earlier request, the IMF had asked Pakistan to raise the general sales tax (GST) to 18 percent.
The IMF mission noted inefficiencies in Pakistan’s sales tax collection system, where the federal government collects sales tax on commodities, and provincial governments collect it on services.
They recommended that the federal government should handle all sales tax collections and suggested ending GST exemptions, raising the tax to 18 percent for both commodities and services.
During the fourth round of discussions, the IMF also called for reforms in the insurance sector, including the establishment of a separate regulatory body and the privatization of three state-owned insurance companies.
The IMF delegation is currently in Pakistan as Islamabad seeks another financial program from the international lender to address its ongoing finance shortage.
