Expected Surge in Gas Prices Next Week: Up to 300% Increase Anticipated
Gas prices in Pakistan are on the verge of a significant surge, potentially reaching up to a 300% increase, primarily driven by mounting circular debt and dwindling gas sector revenue. The Economic Coordination Committee is slated to make the final decision in an upcoming meeting, where proposals encompass price hikes ranging from 100% to 150% for non-protected domestic consumers.
Samaa
In anticipation of another substantial rise in gas prices, authorities are gearing up for a crucial decision due to the escalating circular debt and declining revenue in the gas sector. This decision is set to be made during the upcoming Economic Coordination Committee meeting, which is scheduled to convene in the next few days.
Under consideration is a proposal to hike gas prices for non-protected domestic consumers by a range of 100% to 150%. Additionally, for certain consumption brackets, the tariff might even surge by an astounding 300%, taking into account the inclusion of fixed charges.
For protected consumers, the expected adjustment primarily pertains to increasing fixed charges, with tariff rates likely to remain unaltered for those consuming gas within the range of 0.5 to 0.9 hectometres.
In contrast, consumers utilizing one hectometre of gas are likely to witness tariff adjustments, aligning them with the rates of LPG (liquefied petroleum gas).
The Petroleum Division has underscored the critical need for price adjustments, pointing out that a failure to do so could result in Sui gas companies incurring losses amounting to Rs205 billion. Moreover, the exchequer is currently suffering an annual loss of Rs200 billion due to the provision of LNG (liquefied natural gas) at reduced rates.
In a strategic move to maintain the targeted summer and winter revenue, there is also a proposition to raise fixed charges.
The Economic Coordination Committee meeting next week is expected to present a comprehensive summary regarding the proposed gas price hike.
Officials from the Petroleum Division have emphasized that the brunt of the gas price hike will be borne by consumers starting from July 1, with the price adjustments set to take effect from October 1.
