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IMF frustrated over govt’s failure to notify revised gas price

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  • IMF has directed govt to review gas tariff prices biannually.
  • PDM govt delayed gas hike due to political reasons, IMF told. 
  • IMF also questions Ogra on why gas tariffs were not notified. 

ISLAMABAD: The International Monetary Fund (IMF) has expressed its frustration over the government’s decision to not notify the revised gas price every six months – July 1 and January 1 – in a financial year, reported The News on Wednesday.

The Fund has directed the government to review the gas tariff prices biannually to avoid the accumulation of circular debt in the gas sector.

“The visiting IMF mission flagged the issue of not increasing the gas tariff on a biannual basis by government,” a senior official who was part of the meeting with the Fund told The News

“The Fund argued failure to hike the gas tariff biannually for the last 10 years since 2013 caused a massive buildup in the gas circular debt.”

The Pakistani officials told the Fund that the caretaker government had notified the unprecedented hike in gas tariff from November 1. They also explained that the government was hoping it would generate Rs980 billion in revenue in eight months. So, the government may not be required to hike the tariff due from January 2024 when the regulator comes up with a determination to be effective from January next calendar year.

The interim government also communicated to the Fund that the Shehbaz Sharif-led government had delayed the increase in gas tariff because of political considerations, and the caretaker regime has to come up with a massive increase, which will end the process of further increase in the circular debt in FY24 that now stands at Rs2,900 billion.

The IMF mission Tuesday also held a meeting with Ogra officials and asked the regulator why it has not notified the gas tariffs after the lapse of 40 days since its determination. The Fund was told the regulator cannot do it on its own, as under Section 21 of the law, it has to seek guidelines from the government.

On Monday, the government informed the IMF that it expects the Current Account Deficit (CAD) to decline by $2 billion to end at $4.5 billion compared to the $6.5 billion projected till the end of June 2024.

A report published in The News on Tuesday stated that the downward projection of CAD indicated that the government was expecting that imports would continue to decline in the remaining period of the current fiscal year.

Amid difficulties in materialising the external dollar inflows up to the desired mark, the Pakistani authorities have no other option but to reduce the CAD to avert a balance of payment crisis.

Pakistan’s external financing requirements stood at $28 billion — foreign debt servicing of $23.5 billion and CAD projection of $4.5 billion.

After the signing of the IMF agreement under the $3 billion Stand-by Arrangement (SBA) programme, the forex reserves saw an improvement in July 2023, but in the last two months, the pace of external loans and grants has slowed down. Now the authorities are expecting that completion of the first review of the IMF programme would push up the dollar inflows from multilateral and bilateral creditors.

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April FDI in Pakistan increased to $358.8 million, according to SBP

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The inflow for April was $358.8 million, up 177% from $132 million in April FY23. Still, that was 39% more than the $258 million from March.

China was the largest investor, with $439.3 million in FDI from the nation between July and April of FY24—the greatest amount—as opposed to $604 million during the same period of FY23. In April, China accounted for $177 million of the total investment.

With $51.93 and 51.89 million invested in Pakistan, the United Arab Emirates and Canada came in second and third, respectively.

The power industry was the main draw for foreign investors in FY24, which ran from July to April. This period’s FDI in the power industry was $637.5 million, compared to $776.2 million the previous year. From $338 million to $460 million this year, Hydel Power garnered more attention.

Continue reading: In FY23–24, Pakistan’s per capita income increased to $1680.

According to a separate data released on Wednesday, Pakistanis’ per capita income increased to $1680 in FY2023–2024.

The size of the national economy grew from $341 billion to $375 billion in the current fiscal year, according to figures made public by PBS.

Throughout this fiscal year, Pakistanis’ yearly per capita income increased by Rs 90,534; the monthly rise was Rs 7,544.

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OGRA forbids the purchase or sale of inferior LPG cylinders.

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The 313 LPG marketing and 19 cylinder-producing companies received notices from the OGRA, which described the act of refilling inferior LPGO cylinders as harmful.

Avoid supplying LPG to unlicensed distributors, the OGRA has cautioned LPG marketing companies. Only approved distributors will be able to sell and buy LPG going forward, per the notification, which states that new SOPs have been developed for the LPG industry.

Additionally, the warning said that the decision was made in an effort to preserve both lives and the business in response to an increase in cylinder blast occurrences.

Price reductions of Rs 20 per kilogramme for liquefied petroleum gas (LPG) were implemented in Quetta on May 3.

There is a reduction of Rs 20 on LPG prices, which means that the price per kilogramme drops from Rs 280 to Rs 260.

The costs of LPG were reduced by Rs 20 per kilogramme earlier, bringing the total decrease to Rs 40 per kilogramme over a few weeks. This is something worth noticing.

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PIA announces a significant student discount.

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According to an airline spokesman, the national flag carrier has recently raised the baggage allowance to 60 kg.

Currently, PIA flies one flight per week on Sundays between Islamabad and Beijing.

The discount may be useful to students who intend to spend their summer vacations in Pakistan or who wish to return home after earning their degrees.

Before, students who wanted to visit China could now receive a 27% reduction on their fares through PIA.

On Eid ul Fitr, the national flag airline also reduced the cost of domestic flights by 20% for both economy and executive economy classes.

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