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Govt Plans Special Gas Tariff

Govt Plans Special Gas Tariff-9

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Govt Plans Special Gas Tariff For Low-Income Group

ISLAMABAD: On Monday that the caretaker government is working on a plan to introduce a special gas tariff for low-income groups in Balochistan to offset the impact of a possible tariff hike.

According to him, this issue was also discussed with the management of Sui Southern Gas Company Limited (SSGCL) operating in Balochistan province. The move was suggested in view of the winter season, which is still a few months away. Govt Plans Special Gas Tariff

“We have to take care of low-income consumers through safety nets. For example, in Balochistan, low-income consumers become comparatively more vulnerable as the cold wave hits the province every year during the winter season,” a source said. comes”.

“We want a special tariff for low-income consumers in Balochistan but it will cost Rs 10 billion annually and is no longer sustainable if the cumulative effect of the previous year is taken into account,” the source added. Said that the government wants. Protect low-income consumers from gas price shocks. Govt Plans Special Gas Tariff

Other sources said there was a proposal to provide direct subsidies to low-income gas consumers to protect them from the impact of rising gas prices.

“Government can subsidize the low income group of gas consumers through BISP (Bizari Income Support Programme).”

Currently, the government uses cross-subsidies for low-income gas consumers. Sources maintained that the government has stepped up its efforts to finalize the natural gas price hike scenario, as the International Monetary Fund (IMF) stepped up pressure to hike gas prices. Is.

Senior officials from the petroleum and finance departments as well as the Oil and Gas Regulatory Authority (OGRA) on Monday came together to finalize a 45-50 per cent hike in gas prices.

“Yes, the IMF has increased its pressure on the government to notify the hike in gas prices from July 1, 2023, as determined by Ogra for consumers, on June 2, 2023,” a senior Energy Ministry official said.

On June 2, Ogra had announced a hike of 50% or Rs 415.11 per MMBTU for customers of Sui Northern Gas Pipeline Limited (SNGPL), taking the subscribed gas price to Rs 1238.68 per MMBTU. The regulator hiked gas price by 45 per cent or 417.23 per mmbtu for SSGCL customers.

SNGPL still has a shortfall of Rs 560.378 billion from last year as of FY23 while SSGCL has a shortfall of Rs 97.388 billion and thus the current shortfall of both the gas companies stands at Rs 657.766 billion. It is Rs. another source said.

Govt Plans Special Gas Tariff

Sources say that due to the delay in the revision of gas prices from July 1, 2023, the revolving debt in the gas sector has increased by 500 billion rupees.

The official said that people living in remote areas were forced to use expensive gas cylinders while those who were in the country’s urban centers and had piped gas connections were paying much less.

The official also said the government is working on seven sectors, including depleting gas reserves and wells that were blocked by advanced technologies, to improve production.

“We are also emphasizing on how to increase oil and gas exploration and production activities across the country to address the circular debt crisis that has crippled E&P activities,” the source said. have slowed down.”

Sources added that the government is working on a plan to shut down gas companies to bring efficiency and reduce unaccounted gas (UFG). “We want to set up a gas transmission and decentralize gas utilities to reduce losses and improve efficiency.”

A senior government official said that circular debt management was a major challenge for the government.

He said that the government wants to reduce the circular debt by making book adjustments between different companies.

At present, liquefied natural gas (LNG) has emerged as a major contributor to circular lending. Previous governments have been directing domestic consumers to pay higher prices for LNG to overcome the gas crisis during the winter season.

Currently, three state-owned utilities – SNGPL, Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL) – are mired in revolving debt due to faulty policies of previous governments that have weathered In winter, LNG was diverted to domestic consumers. Weather

SNGPL had to pay Rs 476 billion to PSO for supply of LNG. SNGPL was also stuck in circular debt as there was no legal framework for recovery of LNG bills from domestic gas consumers.

The previous government of Pakistan Tehreek-e-Insaf (PTI) had approved the weighted average price of gas bill from Parliament but it was challenged in the Sindh court.

When the coalition government led by the Pakistan Democratic Movement (PDM) came in, it never acted on the implementation of this bill as a key gas pro.

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