Observer Report Islamabad
The federal government is all set to reduce the gas tariff up to 35 per cent for the independent power producers operating on low quality gas in a bid to rank these plants in a higher merit order.
This plan will result in putting burden on the consumers to cross-subsidize the gas for power plants and the rate of federal excise duty may also go up.
According to the current formula, the government prioritizes the operation of those power plants which operate on cheaper fuel – dedicated gas which is low quality and cannot be transported to domestic consumers. Power plants and fertilizer sectors use this gas.
The IPPs negotiation committee had agreed to reduce gas tariff for the plants under a deal. A summary has been moved to the Economic Coordination Committee of the Cabinet for formal approval.
