Pakistan is set to modify gas tariffs for the fertilizer sector in October in response to the International Monetary Fund's request. This decision was made by the interim government due to the IMF's refusal to provide gas subsidies to the fertilizer industry.
This tariff adjustment coincides with the commencement of a review with the IMF as part of a $3 billion Structural Adjustment Program (SAP) loan.
Under the new pricing structure, the fertilizer sector is expected to witness a gas tariff increase of around Rs580 per MMBtu for feedstock purposes. The cost of gas for fertilizer production will rise by Rs278 per MMBTu, resulting in a new gas rate of Rs1,580 per MMBTu.
This initiative to revise gas prices in various sectors, including fertilizer production, is part of a broader strategy to address the significant circular debt in Pakistan's energy sector.