KARACHI: The Oil and Gas Regulatory Authority (Ogra) has approved up to 191% increase in gas price for different sectors of the economy, which is expected to invite a fresh wave of inflation in the country.
The regulatory authority has increased prices for different sectors of the economy including, commercial, cement, power, fertiliser and CNG fuel stations with effect from July 1, 2019.
This is the second gas price hike during the ongoing fiscal year by the Pakistan Tehreek-e-Insaf (PTI) government, reflecting an aggressive approach to bridge the revenue shortfall of both; the Karachi-based Sui Southern Gas Company Limited (SSGC) and Lahore-based Sui Northern Gas Pipeline Limited (SNGPL).
The increase is approved “under the auspices of the IMF,” Taurus Securities said in a post-Ogra decision commentary on the gas price-hike.
“If notified, the said hike is likely to impact the entire economy including households and industries, severely. Resultantly, we may even witness hike in the headline inflation” the research house said.
“Our current CPI forecast for FY20 stands at 11%.”
The Petroleum Division had informed Prime Minister Imran Khan that the hike in gas prices is inevitable because of the high circular debt of Rs181 billion in the wake of a wide gap between the average prescribed gas prices and weighted average sale prices.
