Authorities are preparing for a substantial surge in gas prices in the coming week, driven by escalating circular debt and the gas sector’s diminishing revenue.
The pivotal decision is for discussion at the Economic Coordination Committee’s forthcoming meeting, slated for the next few days.
Under consideration is a proposal that contemplates a staggering 100% to 150% hike in gas prices for non-protected domestic consumers. Certain categories could witness an even sharper rise of up to 300% after integrating fixed charges.
Conversely, protected consumers might experience a hike solely in fixed charges, with the tariff persisting at the current rates for those utilizing between 0.5 and 0.9 hectometres of gas. Those with a consumption of one hectometre will see their tariff adjusted to match LPG rates.
The Petroleum Division highlights the financial imperatives behind the move, indicating that Sui gas entities face a deficit of Rs205 billion without this price augmentation. Moreover, providing LNG at reduced rates costs the treasury a substantial annual shortfall of Rs200 billion.
Additionally, a rise in the fixed charge is on the agenda to ensure the revenue objectives for both summer and winter are met.
This summary, outlining the rationale for the gas price escalation, is scheduled for review at the ECC’s session the following week.
Officials from the Petroleum Division clarify that consumers will begin feeling the financial impact of these adjustments starting July 1, with the changes officially coming into effect from October 1.
