THE government is reportedly all set to increasing the gas tariff up to 173% for non-protected domestic consumers, 136.4% for commercial, 86.4% for export and 117% for the non-export industry. This is being done to ensure IMF benchmarks are met, including a zero hike in the gas circular debt in the current financial year.
Unquestionably needful should be done to address the issue of circular debt in the energy sector. Already the power sector circular debt is haunting us and we cannot allow a similar situation in the gas sector. However, it is essential to approach this issue with a comprehensive strategy that balances the financial stability of the gas sector with the well-being of the general public and the economy. Notably, the massive increase in gas tariffs has the potential to amplify inflation and adversely affect sectors like CNG, which has been an affordable fuel option for vehicles. As such, a more cautious and phased approach is essential to mitigate the potential negative consequences of this decision. First and foremost, it is imperative to recognize the inflationary pressure this tariff hike might exert on the overall economy. With prices of basic commodities already on the rise, an additional burden on energy costs would only exacerbate the financial strain on consumers. Therefore, it is advisable to implement the increase in a phased manner rather than all at once. Furthermore, the government must prioritize the management of gas pilferage and leakages. Despite the proposed tariff hike, the persistent issue of gas theft and inefficiencies within the gas distribution network remain unresolved. The leakage and pilferage not only contribute to financial losses but also hinder the sector’s ability to provide reliable and affordable energy to the masses. Addressing these systemic issues is paramount to ensure that any increase in tariffs does not further burden the consumers. It is also crucial for the authorities to accelerate exploring local gas reserves. By tapping into domestic resources, the government can potentially reduce reliance on expensive imported gas, thereby providing a more stable and affordable energy supply for the public.
