Pakistan: Amid slump in economy, petroleum division notifies huge hike in gas prices

Islamabad [Pakistan]: A significant increase in petrol prices has been announced by the federal government, which will go into effect from November 1, ARY News reported.

Regarding the significant increase in petrol prices for domestic, export and non-export units, CNG, cement and other industries, the Petroleum Division released a notification.

Protected customers who use 25 to 90 cubic metres of petrol per month did not see a price increase for the fuel, but their fixed costs did climb from PKR 10 to PKR 400.

According to the notice, domestic users who are not covered by insurance had their petrol costs increased by more than 172 per cent, ARY News reported.

The Cabinet’s Economic Coordination Committee (ECC) approved a number of summaries on October 23, including one that revised the price of natural gas, according to ARY News.

According to the tariff schedule provided by the Ministry, a summary of the change of the natural gas sale pricing for the FY 2023-24 was also approved, with effect from November 1, 2023, rather than October 1, 2023, as per the Ministry of Energy’s Petroleum Division.

It was discovered that a significant increase in the petrol price of up to 193 per cent is expected to be approved by the federal cabinet

The government is likely to increase the local gas tariff up to 173 per cent for non-protected domestic consumers, 136.4 per cent for commercial, 86.4 per cent for export and 117 per cent for the non-export industry, according to ARY News.

The World Bank has reported an increase in poverty in Pakistan during the previous fiscal year due to soaring food and energy prices, labour market challenges, and flood-related damages, Dawn reported.

According to the Macro Poverty Outlook, which was prepared for the recent annual meetings of the World Bank and IMF in Marrakesh, Morocco, prolonged and high inflation in food and energy prices, combined with a lack of substantial economic growth, could lead to social upheaval and negatively impact the well-being of disadvantaged households that have already seen their savings dwindle and incomes decline.

The report indicates that poverty has risen due to declining wages, reduced job quality, and the impact of high inflation on the purchasing power of people living in poverty, according to Dawn.

Inflation is expected to remain elevated at 26.5 per cent in fiscal year 2024 before moderating to 17 per cent in fiscal year 2025 due to high-base effects and a decrease in global commodity prices.

However, the report notes that increased petroleum levies and energy tariff adjustments will sustain domestic energy price pressures, further contributing to economic and social insecurity.