According to reports, the Oil and Gas Regulatory Authority (OGRA) had proposed a 245% increase in gas tariffs. However, the petroleum division rejected the proposal and suggested a 15% increase in prices. The latest hike in gas prices has been proposed at a time when the review team of the International Monetary Fund (IMF) is in Islamabad to evaluate the government’s compliance with the conditions of the $6 billion bailout package. Moreover, the IMF was expecting the latest hike in gas prices to be enacted from 1st January. However, the federal government shelved the proposal twice fearing public and political outrage.
In line with the directions of PM Imran, the petroleum division has suggested a 5% increase in gas prices for domestic consumers. It has also suggested increasing meter rent from Rs. 20 to Rs. 80 for domestic users. As a result, domestic users and small business enterprises consuming up to 40 to 50 units monthly will see their bills go up by Rs. 220.
The decision will hit masses and result in a multiplier effect on almost all the business activities resulting in a price hike. The increase in petrol and diesel prices will increase inflation as almost all sectors are affected by it.