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Gas tariff set to increase by up to 100%

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1 year ago

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  • Summary for new gas tariffs finalised, sent to ECC for approval.
  • Gas sector’s circular debt reached Rs2,700 billion.
  • Up to 1 mmBtu usage price to go up from Rs2,000 to Rs3,500.

KARACHI: The gas tariffs are set to go up by up to 100% for different categories of consumers in line with the conditions of the International Monetary Fund (IMF) to control the mounting circular debt, The News reported on Tuesday.

According to the report, the summary for new gas tariffs has been finalised and submitted to the Economic Coordination Committee (ECC) for approval.

Sources said that once the summary sailed through the ECC, it would be submitted to the federal cabinet. “The new rates would be applicable with effect from Oct 1 after the federal cabinet’s approval,” they said.

The gas sector’s circular debt has reached Rs2,700 billion. 

According to the proposal, up to 1 mmBtu usage price to go up from Rs2,000 to Rs3,500. The sources noted that circular debt would increase by Rs46 billion if gas prices were not hiked by the end of the current financial year and the shortfall of the companies will be in the vicinity of Rs185 billion.

The proposal encompasses a substantial adjustment in fixed monthly charges for protected gas consumers.

Under the plan, it is expected that domestic consumers will be burdened with a hefty 100% increase in gas charges, while other consumers might face a proposed hike of 198.33%.

These tariff adjustments are part of the caretaker government’s strategy to address the persistent circular debt issue and fulfill commitments to the Fund, the sources said.

They said the decision would naturally fuel inflation in Pakistan, which is already at a record-high level thanks to the constant increase in fuel and energy tariffs, resulting in higher food prices, however, the gas price hike is a key condition of the IMF programme. 

As the new tranche is to be released in November, the gas sector’s circular debt reduction is a must under the IMF condition, which can be done only through a hike in gas prices.

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Irfan Siddiqui meets with the PM and informs him about the Senate performance of the parliamentary party.

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2 days ago

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The head of the Senate’s Foreign Affairs Standing Committee and the PML-N’s parliamentary leader paid Prime Minister Muhammad Shehbaz Sharif a visit in Islamabad.

Senator Irfan Siddiqui gave the Prime Minister an update on the Parliamentary Party’s Senate performance.

Additionally, Senator Irfan Siddiqui gave the Prime Minister an update on the Senate Standing Committee on Foreign Affairs’ performance.

He complimented the Prime Minister on his outstanding efforts to bring Pakistan’s economy back on track and meet its economic objectives.

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Business

SIFC Increases Direct Foreign Investment: Investment in the Energy Sector Rises by 120%

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2 days ago

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The Special Investment Facilitation Council is intended to help Pakistan’s energy sector attract $585.6 million in direct foreign investment in 2024–2025. The amount invested at the same time previous year was $266.3 million.

This is a notable 120% rise, mostly due to investments in gas exploration, oil, and power. Such expansion indicates heightened investor confidence and emphasizes the development potential in important areas.

The State Bank reports that foreign investment in other vital industries has increased by 48% to $771 million.

This advancement is a blatant testament to SIFC’s efficient investment procedure and quick project execution.

The purpose of the Special Investment Facilitation Council is to establish Pakistan as an investment hub by aggressively promoting regional trade and investment in the energy sector and other critical industries.

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Business

Discos report losses of Rs239 billion.

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2 days ago

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When compared to the same period last year, the data indicates that discos have decreased their losses in the first quarter of the current fiscal year.

The distribution businesses recorded losses of Rs239 billion in the first three months of the current fiscal year, a substantial decrease from the Rs308 billion losses sustained during the same period the previous year.

Additionally, the distribution businesses’ rate of recovery has improved. It has increased to 91% in the first quarter of this year from 84% in the same period last year, indicating success in revenue collection.

Regarding circular debt, the Power division observed a notable change. Last year, between July and October, the circular debt grew by Rs301 billion. Nonetheless, this year’s first four months saw a relatively modest increase in circular debt, totaling about Rs11 billion.

These enhancements show promising developments in the electricity sector’s financial health in Pakistan, where initiatives are being made to accelerate recovery rates and slow the expansion of circular debt.

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