ISLAMABAD – The federal government has decided against providing relief to masses in natural gas prices in new fiscal year, starting from July 1, 2024, despite a proposal from the Oil and Gas Regulatory Authority (OGRA) to reduce the gas price by 10 percent.
Instead of lowering the prices, the government has decided to increase the gas prices for captive power plants (CPPs) by Rs250 per mmBtu, raising it from Rs2750 per mmBtu to Rs3000 per mmBtu.
The decision was made according to the International Monetary Fund (IMF) conditions as the South Asian country is looking for another bailout package to avoid default. If implemented, this move would raise an additional Rs110-115 billion in revenue.
However, the gas prices for all other consumers will be kept unchanged. The surplus revenue would be used to mitigate the existing circular debt, which has surged to Rs2,900 billion.
The Petroleum Division is of the view that the Sui gas companies should use the surplus revenue to reduce the circular debt.
The IMF has requested that the Pakistani government raise the gas prices for captive power plants to match the prices of RLNG by January 1, 2025.
To start, the government will increase the gas price for these power plants by Rs250 starting on July 1, and will further increase it by Rs700 per mmBtu from January 1, 2025, to comply with the IMF's requirement.
