The expected rise in gas tariffs has been implemented by the new government among varying expert opinions. The 143 percent increase in the tariffs is definitely way more than the consumers and market experts predicted, however, the gas producing companies were incurring losses in the last five years and without the hike, a collapse was expected. The new tariff introduced promises to protect residential consumers over commercial ones, however, there are several areas that the government needs to clarify.

There is no doubt that the move was long due. Running a system with such a subsidy being offered and the companies producing gas are facing a loss consistently is not a model which can be sustained. Had the previous government introduced a hike earlier, such a drastic tariff increase would not have been on the cards. However, this increase at this point will not only put a lot of pressure on the businesses but will also hinder the growth of the local market. An increase in the production cost will result in higher costs for the consumers, who will be more inclined towards lesser consumption. That will translate into lower sales for the producers.

Another major concern is that the increase in the price of gas will mean that local goods in the market will lose consumers because imported goods will become cheaper. At the same time, this will also impact our exports. An increase in the prices will mean foreign consumers moving away to other products rather than buying Pakistani products. So the local market will not only lose exports but will also lose out in the local market due to the expected influx of the Chinese goods in the near future. Many experts have suggested an increase in exports and recovery of losses to bridge the gap for the gas producing companies and the revenue earned by the state.

The government also needs to highlight an alternative plan in case this particular plan fails because the absence of one will translate into a lot of confusion and a lack of cooperation from all ends. While the price hike is inevitable, all relevant stakeholders must be brought on board to ensure that the plan materialises and translates into a more sustainable future for the country. Resentment from all sides will only create more cleavages and will push the government to reconsider its decision once more.