PD Clarifies New Gas Tariff Effective from November 1, 2023
The government believes that this tariff adjustment is a necessary step to address economic challenges, with the Caretaker Minister for Energy and Petroleum emphasizing its importance for the country's fiscal stability.
Karobar
In response to recent media reports suggesting a gas tariff increase from July 1, the Petroleum Division (PD) has clarified that the revised prices will take effect from November 1, 2023.
The PD issued a statement emphatically stating, "The gas price revision is effective from November 01, 2023," emphasizing that this information was made explicit in the initial press release following approval from the cabinet and ECC. The PD categorically refuted any claims that the price hike was retroactive.
The federal government granted approval on Monday for a natural gas price increase for various consumer categories, following the recommendations of the Oil and Gas Regulatory Authority (OGRA). This adjustment is set to come into effect from November 1, 2023.
The Economic Coordination Committee (ECC) of the Cabinet convened on October 23, 2023, to review the proposal put forth by the Petroleum Division and subsequently approved the new gas prices. However, during a meeting held on October 30, 2023, the Federal Cabinet referred the proposal back to the ECC for further deliberation.
In the subsequent ECC meeting on October 30, 2023, the revised natural gas prices were officially approved.
The government justifies this increase as a crucial measure to tackle the country's economic challenges. Caretaker Minister for Energy and Petroleum, Muhammad Ali, emphasized the necessity of the decision during a press conference, accompanied by Caretaker Minister for Information, Murtaza Solangi.
Ali acknowledged the historic reluctance of past governments to raise gas prices, but he stressed the current administration's commitment to addressing the nation's economic issues. He noted that OGRA's projected revenue requirement for the year is Rs697 billion, with Rs210 billion allocated for Re-gasified Liquid Natural Gas (RLNG) diversion to the domestic sector.
The interim minister pointed out that due to mounting losses, the government lacked the capacity to invest in the exploration of new reserves, leading to increased reliance on imported fuels and a surge in the import bill. Moreover, this growing fiscal deficit due to import payments has driven up interest rates and inflation in Pakistan. As a result, these tariff adjustments are seen as a means to curb inflation and lower interest rates, potentially contributing to Pakistan's economic stability.
