On Tuesday, the Oil & Gas Regulatory Authority reduced the average recommended gas prices of SNGPL by 10% and SSGC by 4% in light of the two public utilities’ income requirements for the coming fiscal year. On average, SNGPL customers should spend Rs179.17 per mmBtu less in the coming fiscal year, while SSGC customers should save Rs59.23 per mmBtu.
However, that will not happen for SNGPL consumers because the government plans to collect the Rs581 billion rate disparity that was not passed on to them over the last six years. . According to a report in this paper, the Ogra’s determination of SNGPL’s financial losses on account of average price increases from FY19 to FY24, which were not passed on to consumers in full by the government for fear of a political backlash, allows the authorities to raise the company’s petrol prices by up to 87 percent next year. The government may not recoup the entire amount from inflation-stricken petrol consumers in a single year, but rather over a number of years. Authorities have previously announced plans to boost gas and electricity costs beginning with the new fiscal year.
Energy inflation has been a major driver of the rising cost of living in recent years. Despite thisWith the government attempting to win yet another IMF loan to maintain the country’s newfound economic’stability’ and boost its credit rating, the authorities have also disclosed with the Fund their plans to raise petrol prices in August and the base power bill in July. Furthermore, the government would have to raise taxes to increase its revenue by 1.5 percent of GDP. These policies will increase inflation, burdening the people with more prices. The majority of households’ budgets, particularly those in the low- to moderate-income bracket, are already stretched thin; additional erosion of purchasing power and real pay decreases will push them far beyond the breaking point. The forthcoming budget and accompanying financial measures will determine who will suffer the ever-increasing cost of IMF-mandated changes: the privileged classes or the unfortunate majority. The growing disparity between the haves and have-nots is already pulling apart Pakistan’s social structure.
Unless the government bridges this gap, things will spiral out of control, making it difficult for politicians and policymakers to deal with the resulting upheaval. Protests over economic policies and high prices are escalating and are unlikely to stop without financial assistance.