Govt misses deadline for notifying gas tariff

Pakistan's government has failed to meet a critical July 1 deadline for notifying biannual gas tariffs, a breach of a key structural benchmark under the International Monetary Fund's (IMF) $7 billion Extended Fund Facility (EFF). This missed target raises concerns about the program's progress and Pakistan's commitment to fiscal reforms.

Under the EFF, Pakistan committed to notifying semi-annual gas tariff adjustments on July 1 and February 15 each year to ensure energy tariffs cover costs. The successful third review of the EFF in April introduced 11 new structural benchmarks, including those related to the energy sector, making this missed deadline particularly significant.

Senior government officials attributed the delay to several factors. These include legal challenges surrounding the appointment of Nabeel Ahmad Awan as the acting chairman of the Oil and Gas Regulatory Authority (OGRA) and unresolved issues related to uniform gas (UFG) targets. The country is grappling with a substantial circular debt in its gas sector, estimated at over Rs3.44 trillion, further complicating tariff adjustments and financial stability.