Pakistan has one of the most complex systems in place for tariff determination, resource allocation and investing in projects. Therefore, it comes as little surprise that there is an increase in tariff because of revenue shortfalls the gas utility is facing, mainly on account of receivables that would never be recovered. At a time when the country faces a shortfall of gas and electricity, it would make sense for the government to look at projects that address these concerns. The import of LNG was one big step in that direction, meant to address concerns for the industrial and CNG sectors that do little besides complain about the gas shortage. Each winter, complaints of industrial units, especially ones in Punjab, become louder. Domestic consumers also continue to protest — albeit in a quieter fashion.
Punjab and Khyber-Pakhtunkhwa (K-P) are again facing the prospect of a tariff hike — if the federal government approves — at the turn of the year. But despite the tariff hike, gas shortage in these two provinces will continue to persist. While it is the right of every Pakistani to have access to the fuel, it is increasingly worrying that there is little tangible being done to ensure this right. Imported LNG will serve the industrial sector because it makes business sense to accommodate entities willing to pay more. At the same time, gas utilities — that have not published their accounts for years — continue to cite revenue shortfalls to push for the tariff hike. Investing in pipelines and looking to increase the gas supply remains a pipedream. When state-owned entities are accused of non-payment of bills, expecting the government to ensure that ordinary citizens get access to gas becomes a far-fetched idea. Despite the tariff hike that is in the offing, Punjab and K-P will continue to face the winter cold amidst a gas shortage. The petroleum minister says supplying domestic consumers with gas is an expensive proposition. But can the government really use this as an excuse to do little about the gas shortage being faced by citizens?
Published in The Express Tribune, December 23rd, 2015.
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