ISLAMABAD (Reuters) – As Pakistan gears up to unveil its annual budget, all eyes are on the government’s strategy to distribute the burden of the impending energy price adjustments, a prerequisite for securing the much-needed International Monetary Fund (IMF) bailout.
Tensions are running high as the authorities prepare to raise gas and electricity tariffs from the new fiscal year, a move that could further exacerbate the inflationary pressures plaguing the nation’s households, particularly those in the low- to moderate-income brackets.
“The upcoming budget and the financial measures accompanying it will determine who will bear the ever-increasing burden of IMF-mandated adjustments: the elite classes, or the hapless majority,” said Hafiz A. Pasha, a renowned economist and former finance minister.
The government has already shared its plans with the IMF to increase gas prices from August and the base electricity tariff from July. Additionally, taxes are expected to be hiked to boost revenues by 1.5% of GDP, as per the Fund’s demands.
Read More:- Pakistani Stocks Soar as KSE-100 Hits Record 76,000 Mark
These measures are aimed at preserving Pakistan’s newfound economic ‘stability’ and improving its credit rating, but they come at a steep cost for the common citizen.
“Household budgets of the majority, especially those in the low- to moderate-income bracket, are already stretched thin; further erosion in their purchasing power and reductions in real wages will thrust them far beyond breaking point,” warned Pasha.
The Oil & Gas Regulatory Authority (OGRA) recently slashed the average prescribed gas prices for the next financial year, providing temporary relief to consumers. However, the government intends to recover Rs581 billion in tariff differentials from Sui Northern Gas Pipelines Limited (SNGPL) customers, which were not passed on to them during the last six years.
According to a report, OGRA’s determination of SNGPL’s financial losses on account of average price increases from FY19 to FY24 provides room for a hike of up to 87% in the company’s gas prices next year.
As protests against economic policies and high prices continue to intensify across the country, the widening gap between the haves and have-nots is tearing apart Pakistan’s social fabric, raising concerns about potential unrest if the government fails to strike a balance in its upcoming budget.
Winston Mall: please contact +92-314-5166334 or visit https://winstonmall.com/
