The coalition government has eliminated a subsidy on gas supplied to the export sector, thereby fulfilling another International Monetary Fund (IMF) condition.
The Sui Southern Gas Company (SSGC) notified exporters on May 1 that they would no longer receive subsidised gas following the federal government’s abolition of a Rs80 billion gas subsidy for the export sector.
The notification stated that the Oil and Gas Regulatory Authority (OGRA) approved rate will be implemented to all export sectors on May 1, after which export sectors will pay an additional $4 per million British thermal units (MMBTU) for Regasified Liquefied Natural Gas (RLNG).
It is pertinent to note that the federal government terminated the subsidies in response to IMF conditions.
It was reported earlier in the day that the delay in agreement with the International Monetary Fund (IMF) impaired the timeline for the preparation of the new budget.
Due to political and economic unpredictability, the budget strategy document for fiscal year 2023–2024 could not be drafted, according to sources. The budget strategy paper was expected to be drafted and approved by the cabinet in the second week of April, according to sources.
According to sources, “the situation has impacted the schedule for determining the limit of development and current expenditures.”
Pakistan’s economy is in disarray as a result of financial difficulties and the delay of an agreement with the International Monetary Fund (IMF) that would discharge much-needed funding to prevent the risk of default.
On April 21, it was reported that the International Monetary Fund (IMF) had asked Pakistan to ‘do more’ to unblock a stalled loan programme, despite Saudi Arabia and the United Arab Emirates’ assurances regarding external funds.
Finance Secretary Hamid Yakoob’s meeting with the International Monetary Fund in the United States remained ‘unfruitful’ as the international lender has given the plan to secure $1 billion from commercial banks to release the loan programme.
The staff-level agreement was originally scheduled to be signed on February 9, but IMF demands caused a delay.