A wise decision

September 11, 2018

ECC has ultimately deferred gas tariff to work out a mechanism for rearrangement of subsidy with the sanction of the PM. The issue came up for discussion at the ECC meeting. The meeting discussed the rationale behind 186 per cent increase proposed for the poorest domestic slab of 100 and 300 cubic meters per month and 30pc for all other consumer categories when such a pattern was never part of the gas pricing in the past. There were some suspicions over the proposal and the meeting felt the need for adjustments in proposed rates. The ECC also asked all the provincial governments to launch a crackdown against a mammoth increase in the price of liquefied petroleum gas (LPG) to end sufferings of the poor people. In reality, the piped gas is available to only a 40pc population while remaining 60pc still relies on LPG and firewood. The LPG price has increased by 70% over the last few weeks and the government will make sure a method for the LPG price stability. Earlier Prime Minister Imran Khan in the first major policy decision of his rule gave go-ahead to the increase in gas tariff, of which domestic consumers were to bear the deep impact. Subsequent to the new tariff implementation, the price for domestic consumption would have increased by a gigantic 186 per cent, while commercial consumers would also have been paying 26 per cent more for the utility. This development could have had repercussions for both the economy and the general public as the producers would have passed

on the impact of the raised tariff to the consumers, the price of products would have increased, and sales would have diminished. It means the massive hike in the tariff would have increased the cost of production, which could have ended up in making local products uncompetitive. The country is already ranked low in international competitive indexes and such decisions could have worsened the situation further. Arrangements have also been made to provide gas to domestic fertilizer plants to ensure that fertilizer requirements of the farmer community are fulfilled. Farmers are the crucial part of Prime Minister Imran Khan’s economic policy and the government has taken a very wise decision not to adversely affect them. Therefore, despite tough financial position the government has avoided putting an additional burden of imported product on farmers. Naturally, increase in gas tariff led to increase in electricity tariffs as well.

Despite tough financial position government has avoided putting an additional burden on consumers.