Islamabad: The International Monetary Fund (IMF) has expressed frustration with the government’s decision not to report the price of the revised gas every six months July 1 and January 1 – In a financial year, The News reported on Wednesday.
The fund has instructed the government to double review gas tariff prices to avoid the accumulation of circular loans in the gas sector.
“ The visiting IMF mission flagged the issue of non-increase in gas tariffs by the government on a two-year basis,” A senior official who was part of a meeting with the fund told The News.
“ The fund argues that the failure to double gas tariffs in the last 10 years since 2013 has led to a massive increase in gas circular debt۔”
Pakistani officials told the fund that the caretaker government had reported an unprecedented increase in gas tariffs since November 1. He also explained that the government hopes to generate Rs 980 billion in eight months. Therefore, the government may not need to increase the tariffs due from January 2024 when the regulator is determined to be effective from January next calendar year.
The interim government also told the fund that the Shahbaz Sharif-led government had delayed raising gas tariffs due to political concerns, And the caretaker government will have to make a massive increase, which will end the process of further increase in circular debt in fiscal year 24, which is now Rs 2,900 billion.
The IMF mission also held a meeting with OGRA officials on Tuesday and asked the regulator if it had met 40 days after its commitment Why not inform the tariff. The fund was told that the regulator itself could not do so, as under Section 21 of the law it would have to seek guidelines from the government.
On Monday, The government informed the IMF that it expects the current account deficit (CAD) to end at $ 4.5 billion with a decrease of $ 2 billion while $ 6.5 billion Expected to end June 2024.
A report published in The News on Tuesday said that the projection below the CAD indicated that the government was expecting the current financial year Imports will continue to decline for the rest of the year.
Amid difficulties in bringing the arrival of the external dollar to the desired mark، Pakistani authorities have no choice but to reduce CAD to prevent a balance of payments crisis.
Pakistan’s external financing needs stood at the CAD projection of $ 28 billion — $ 23.5 billion foreign debt service and $ 4.5 billion.
Following the signing of the IMF agreement under the TAG1> 3 Billion Standby Arrangement (SBA) program, Forex’s reserves improved in July 2023, but in the last two months, The pace of external loans and grants has slowed. Officials now expect that the completion of the first review of the IMF program will increase the inflow of dollars from multilateral and bilateral lenders.