ISLAMABAD In response to the Oil and Gas Regulatory Authority’s (Ogra) decision to cut gas prices by 10% for the upcoming fiscal year, the federal government has decided not to lower the gas tariff effective July 1. This was reported by The News on Tuesday.
In reality, the Center has increased gas rates for captive power plants (CPPs) by Rs250 per mmBtu to Rs3,000 per mmBtu from the current price of Rs2,750 per mmBtu due to the International Monetary Fund’s (IMF) requirements.
The government, with the exception of CPPs, has chosen to keep the current gas prices in order to achieve a surplus revenue of Rs100–115 billion after achieving the required revenue requirements for the upcoming financial year, senior officials of the energy ministry have told the publication.
“The extra money would be used to gradually pay down the current circular debt, which has grown to an astounding Rs. 2900 billion. The losses from previous years have increased to Rs. 1500 billion, according to the officials.
In the meantime, Ogra has been notified by the Petroleum Division to make sure Sui gas businesses use their excess money to pay down their circular debt.
This comes after the IMF claimed that CPPs, the majority of which are located in the Sui Southern network, squander a significant amount of natural gas because they have a 30–35% efficiency.
As a result, the lender requests that the government link each and every CPP to the national electrical grid.
