Gas price hike

Gas tariff is all set to rise, in what comes as one of the first decisions of the new PTI government — a government that has, all along, been talking about reducing the burden on the common man. But once in the saddle, what caused a bigger concern for the government was how to keep the two gas utilities — Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company (SSGCL) — floating without having to inject funds from the budget that is already running in deficit.

Prime Minister Imran Khan is convinced that for bridging the revenue gap — due to lower sale price as against the price of purchase — of the two gas utilities, there is no other way than to increase the natural gas tariff, by an average of 46 per cent, as determined by the Oil and Gas Regulatory Authority (Ogra) in June. With the PM green-lighting the gas tariff rise, what’s only left is a formal approval by the Economic Coordination Committee (ECC) which would be good enough for the cabinet to notify that the gas is going costlier. The impact of higher gas costs is, thus, passed on to consumers. While the PM also ordered steps to control the gas theft that is inflicting an annual loss of Rs50 billion on the exchequer, it is not going to be of any help to the common man in the immediate term.

Besides the common man, the decision is sure to upset the traders who are already complaining of increasing cost of production due to high gas and power tariffs. Just a few months back, the Pakistan Industrial and Traders Associations Front had called upon the authorities to take steps to enhance the efficiency of the two gas companies and avoid system losses instead of burdening the consumers by raising the gas tariff. Additionally, the government must also focus on the timely completion of the various ongoing gas projects to meet its energy needs at a cheaper cost. 

Published in The Express Tribune, September 6^th, 2018.

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