Sui Northern Gas Pipelines Limited (SNGPL) has proposed a substantial 137.62 per cent increase in gas tariffs per Metric Million British Thermal Unit (MMBtu), aiming for implementation in June 2023.
This tariff adjustment, seeking Rs1,715 per MMBtu, is intended to address the company’s financial shortfall of Rs181.51 billion projected for the fiscal year 2023–24.
The plea to the Oil and Gas Regulatory Authority (OGRA) emphasises the necessity of fixing the gas price at Rs2,961.98 per MMBtu.
Currently priced at Rs1,246.49 per MMBtu, SNGPL proposes a hike of Rs1,209.14 per MMBtu in arrears, with an additional Rs56.48 per MMBtu attributed to rupee devaluation. OGRA is scheduled to review SNGPL’s plea on December 11.
In a related context, the caretaker government, led by Finance Minister Dr Shamshad Akhtar, has announced plans to increase gas prices in Pakistan starting in January 2024.
Dr Akhtar highlighted that this decision aligns with Pakistan’s commitment to the International Monetary Fund (IMF), aiming for a comprehensive review of power tariffs.
The government’s broader economic strategy involves reducing debts, prioritising development initiatives, and implementing governance reforms within government enterprises.
Upon reaching a staff-level agreement with the IMF, Pakistan anticipates receiving approximately 70 million US dollars, contributing to a total assistance amount of about $1.9 billion under the IMF programme.
Dr Akhtar emphasised the need to address the circular debt in the power and gas sectors, which currently exceeds 4 per cent of the Gross National Product (GNP).
Immediate measures have been initiated to mitigate this challenge, including adjustments to electricity and gas rates.
Dr Akhtar underscored the importance of a market-based exchange rate policy and the augmentation of foreign exchange reserves as key priorities for economic stability.