The government has made a fundamental decision to raise the prices of gas on the condition of the International Monetary Fund (IMF) – File: Photo
Islamabad: The Cabinet’s Economic Coordination Committee (ECC) has given fundamental approval for an increase in gas prices and has also given approval to increase the sales tax rate on locally manufactured cars at the local level.
In Islamabad, a meeting was held under the chairmanship of Finance Minister Shaukat Tareen, where four agenda items were discussed in detail, and the matter of sales tax on locally manufactured cars was also discussed.
The caretaker government has given fundamental approval to further increase the price of gas on the condition of the International Monetary Fund (IMF) however, the final approval will be given by the federal cabinet.
According to sources, protected, non-protected consumers, and captive power plants are likely to face an increase in gas prices, with the possibility of an increase of Rs 100 per mmBtu in gas prices for protected consumers, and an increase of Rs 300 per mmBtu in gas prices for non-protected consumers.
It was further mentioned that there is a possibility of an increase of Rs 900 per mmBtu in gas prices for bulk users, and Rs 170 per mmBtu for the CNG sector.
According to sources, the approval for an increase in gas rates for fertilizer plants has also been slightly increased, the final approval for the increase in gas prices will be taken from the federal cabinet and the increase in gas prices will take effect from 1st February.
The meeting approved the increase in sales tax on locally manufactured cars by 25%, which could lead to an increase in car prices.
In the meeting of the Cabinet’s Economic Coordination Committee, a detailed discussion was held on the summary of the possibility of an increase in gas prices from February 1, and after a lengthy discussion, the ECC was of the view that the re-pricing of gas should be in accordance with the revenue requirements of gas companies and has also recommended to fix uniform prices of gas for fertilizers plants.
In the meeting, approval was also given for the share subscription agreement of National Credit Guarantee Company Limited (NCGCL), the ECC has also recommended to the Finance Ministry to sign the SSA with CGCEL, Karandaaz, and the Government of Pakistan.
In addition, the Competition Commission of Pakistan has been directed to investigate the unusually high prices of urea in the market and also directed the Ministry of Industries and Production to ensure stability in the prices of urea in the market.
The ECC has also approved an additional technical supplementary grant of Rs 57.162 billion for launching operations against terrorists and anti-state elements and funds will be used for ending terrorism and anti-state operations against.
The committee has fundamentally agreed to amendments in the OR760(i)/2013 SRO regarding the price of precious metals and precious stones in the Export Policy Order 2013 and Import Policy Order 2022 in its meeting and instructed the Ministry of Commerce, Ministry of Law, FBR, and SECP to formulate detailed suggestions for opening the service sector for export-oriented policy reforms.
The meeting discussed in detail and decided that the determination of the prices of natural gas for sale for the Financial Year 2023-24 (to be applicable from February 2024) should be in accordance with the revenue requirements of gas companies.
After reviewing the Treasury Division’s summary, the committee has also approved an additional technical grant of Rs 7.617 billion under the World Bank’s credit line for the provision of rupee-core funds for the remaining funds.