Authorities Prepare for Substantial Gas Price Hike Due to Rising Circular Debt and Falling Gas Sector Revenue
The escalating circular debt and declining revenue in the gas sector are prompting authorities to prepare for a significant increase in gas prices, potentially reaching up to 300% next week.
The final decision on this price hike is scheduled to be made during an upcoming meeting of the Economic Coordination Committee (ECC) in the next few days.
A proposal under consideration suggests raising gas prices between 100% and 150% for non-protected domestic consumers. For certain consumption levels, the tariff may surge by as much as 300% after accounting for fixed charges.
Protected consumers, on the other hand, are likely to see an increase in fixed charges, while the tariff remains unchanged for those using 0.5 to 0.9 hectometres of gas.
For consumers utilizing one hectometre of gas, the tariff will be aligned with that of LPG.
Potential Rs205 Billion Loss for Sui Gas Companies if Prices Aren’t Raised, While LNG Supply Costs Exchequer Rs200 Billion Annually
The Petroleum Division warns that failing to increase prices could result in Sui gas companies incurring losses of Rs205 billion. Moreover, the exchequer is currently losing Rs200 billion annually due to the supply of LNG at reduced rates.
AKU Alumnus and Medical College Dean Dr. Adil Haider Honored by Johns Hopkins University
To meet the summer and winter revenue targets, it is also proposed to raise the fixed charge.
The ECC meeting next week will witness the presentation of a summary for the gas price hike.
Officials from the Petroleum Division indicate that the increased gas prices will burden consumers starting from July 1, with the price adjustment taking effect from October 1.”
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