Minister vows to take up gas tariff issue in cabinet

Says tariff has been increased to cover whopping losses

KARACHI:

Caretaker Federal Minister for Energy Muhammad Ali has assured businesspeople that he will try his best in the cabinet meeting to bring down gas tariff which is being raised to rein in the circular debt.

Speaking at a meeting during his visit to the Karachi Chamber of Commerce and Industry (KCCI), the minister said the entire gas sector had been suffering annual losses of around Rs400 billion for many years, and last year, the losses reached Rs461 billion.

Now, the accumulated losses of the gas sector have risen to the whopping Rs2,100 billion, therefore, “the increase in gas tariff has been recommended”.

“Work is underway to release the stuck Rs7 billion payable to industries against previous incremental consumption as committed by the energy secretary, while the ministry is also working on introducing a winter package for incremental consumption this year,” he revealed.

“The Oil and Gas Regulatory Authority (Ogra)’s determination of Rs1,350 per mmBtu (million British thermal units) is purely based on average pricing for the whole year, which covers losses of natural gas only and it does not include the cost of liquefied natural gas (LNG), which is more expensive.”

He said according to the Economic Coordination Committee (ECC)’s decision, 60% of domestic gas consumers would bear the burden of Rs400 per month whereas gas tariff for the richer segment had been brought at par with LNG prices.

The minister pointed out that no change in tariff for tandoor operators had been made whereas a marginal increase for commercial users had been recommended as they also included hospitals and educational institutes.

Similarly, a meagre increase for fertiliser sector has been recommended to keep prices of commodities under control.

Published in The Express Tribune, October 29^th, 2023.

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