According to local reporters, Pakistan's government will likely increase gas prices for commercial and domestic users to meet some conditionality of the IMF programme and overcome losses of gas utility companies, gas price adjustments, and gas sector circular debts. The increase in gas prices would also be effective in the cement industry.
The Economic Coordination Committee (ECC) is expected to approve gas price increases across the board (excluding protected consumers). The hikes range from five per cent to 193 per cent, with most category slabs experiencing increases of 80 per cent or more. A formal announcement is awaited.
AKD Securities Ltd said most cement companies rely on their gas-powered captive generators. However, the use of indigenous gas remains minimal, resulting in the aforementioned price increase is expected to impact only two of the companies in the most. Notably, Cherat Cement Co Ltd (CHCC) and Lucky Cement have a reliance on indigenous gas, and an increase in gas prices would negatively impact these two players.
