Karachi, September 18, 2018 (PPI-OT): Strategy – ECC Gives Way to Gas Price Hike; Muted Impact for Domestic Consumers, Variable Impact for Industrial Units
The Economic Coordination Committee (ECC) in its latest meeting pre-mini budget has considered the summary and proposals submitted by the Petroleum Division regarding ‘Natural Gas Sale Price’ for revision of sectoral gas sale prices.
The said revision in gas price will have inflationary impact, whereby raising our initial inflation estimates by 150-200bps to 7.5-8.5%, while fiscal benefits remain limited.
Textiles sector will continue to enjoy old rates and proposal in place to provide sector with subsidize RLNG. Fertiliser sector is most affected through this decision, followed by chemicals. Cements and steels to remain relatively immune.