ISLAMABAD – The federal government has decided against providing relief to masses in natural gas prices in new fiscal year, starting from July 1, 2024, despite a proposal from the Oil and Gas Regulatory Authority (OGRA) to reduce the gas price by 10 percent.
Instead of decreasing the rates, the government has decided to jack up the gas prices for captive power plants (CPPs) by Rs250 per mmBtu to Rs3000 per mmBtu from existing rate of Rs2750 per mmBtu.
The decision has been taken in line with the conditions laid forth by the Intrernational Monetary Fund (IMF) as the South Asian country seeking another bailout package to avoid default. The move, if implemented, would generate an additional revenue of Rs110-115 billion.
However, the gas prices for all other consumers will be kept unchanged. The surplus revenue would be used to mitigate the existing circular debt, which has surged to Rs2,900 billion.
The Petroleum Division is of the view that the Sui gas companies should use the surplus revenue to reduce the circular debt.
The IMF has asked the Pakistani government to increase the gas price for captive power plants at par with the RLNG prices by Januar 1, 2025.
IN the first phase, the government has decided to jack up the gas price for CPPs by Rs250 from July 1 while another Rs700 per mmBtu will be enforced from January 1, 2025, to meet the demand of the global lender.
