Gas price increase

BY raising gas prices by up to 113pc for six months, the coalition government has implemented another IMF-mandated prior action for the resumption of its stalled bailout package. Even if the hike had not been ‘imposed’, an increase in the rates would have been inevitable to save the two gas companies from bankruptcy. The increase — to take effect from last month — will help the government recover Rs310bn from consumers in the second half of the current fiscal and slow down the build-up in gas sector debt. Another rise in gas prices is expected from July. If the gas sector’s long-term sustainability is to be ensured, the authorities will have to move beyond periodic hikes in prices to linking gas rates to the global market. Indeed, this will be tough for both the industry and residential users of the piped fuel because it will involve the removal of massive, unsustainable subsidies. But it is time that a quarter of Pakistani households connected to piped gas stopped their wasteful and inefficient usage while the rest of the population, mostly low-income people, are forced to use more expensive alternatives to cook and heat their homes.