State Minister for Energy (Petroleum Division) Musadik Malik has opposed the supply of subsidised gas to fertiliser manufacturers and power producers, as poor people are paying a high price for the “elite capture”.
Speaking at the concluding session of the sixth edition of The Future Summit, organised by the Nutshell Group, Malik underlined that the government was supplying gas at 70 cents per million British thermal units (mmbtu) to fertiliser manufacturers and at $1.34 per mmbtu to power producers.
In comparison, energy-rich Saudi Arabia was providing gas to its fertiliser and power plants for $2 per mmbtu while Qatar supplied it at $3 and Bahrain at $4, he noted.
To recall, Pakistan has revised up gas tariffs by up to 124% for consumers across the board. Despite the price revision and massive rupee devaluation, the government has announced that it will supply feed gas (a raw material) to a leading fertiliser manufacturer for Rs140 (almost 53 cents) per mmbtu, it has been learnt.
Other fertiliser manufacturers will pay Rs510 per mmbtu for feed gas after the upward revision of 69%. The price of their gas as fuel has been increased by Rs475 to Rs1,500 per mmbtu.
“This (subsidised gas) is the kind of elite capture. This takes away opportunities from millions of poor people by a handful of people, who have the political wherewithal to buy gas at 70 cents or $1.30-1.93,” he lamented.
“People of Pakistan have to be empowered to stop this elite capture and we have to change our systems,” Malik emphasised.
Talking to the media on the sidelines of the summit, he remarked there were two Pakistan – one for the rich and the other for the poor.
“We have yet to decide the principles around which we are going to build our nation. We have to decide on that to embrace the future. We have to decide what kind of economy we are going to have,” Malik commented.
He remarked that the IMF programme was delayed by around four months, as the government made sure that the “poor people remain largely safe from the impact of the programme”.
Despite the upward revision in gas tariffs, some 60% of consumers would remain unaffected by the hike or their tariff would go down, the state minister said.
Malik stated that Sui Southern Gas Company (SSGC) would install meters at town levels to check gas theft and no one would be pardoned, including the officials found involved in the theft.
“The burden of gas theft falls on the poor man as the rich are spared. SSGC will have to give a full account of the gas theft. If SSGC officials are found involved in the theft, they will lose their jobs,” he noted.
Malik said that an agreement had been signed with Russia for buying cheap oil and delivery would start from March. The upward revision in tariffs will help reduce the circular debt to zero over a period of time.
Published in The Express Tribune, February 17th, 2023.
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