Pakistani households are facing the prospect of yet another blow to their budgets as the Oil and Gas Regulatory Authority (OGRA) proposes a further increase in gas prices. This comes on top of a staggering 172% hike implemented in November, highlighting the growing burden of energy costs in the country.
Chairman of OGRA, Masroor Khan, citing depleting domestic gas reserves and the need for costly import of Liquefied Natural Gas (RLNG), has requested the government to approve the price hike. Sui Northern Gas Pipelines Limited (SNGPL) has further exacerbated the situation by demanding a staggering 131% price increase, adding to the already worrisome scenario.
The proposed hike would significantly impact monthly gas bills, with consumption slabs from 25 to 400 cubic meters witnessing a rise of 50% to 100%. For consumers using above 400 cubic meters, the price per unit will climb from Rs 3100 to Rs 4000 per MMBTU. While the fixed charges for protected consumers (those using less than 25 cubic meters) remain unchanged, the increase in other slabs is likely to be felt acutely by a significant portion of the population.
This latest development comes amidst concerns about dwindling gas reserves. According to OGRA officials, domestic production has fallen short of demand for over a decade, necessitating the import of expensive RLNG. This import gap, coupled with rising global gas prices, has placed immense pressure on the government to bridge the financial gap.
The previous gas price hike in November aimed to address the losses incurred by gas suppliers, which have ballooned from Rs 18 billion annually to a staggering Rs 879 billion. OGRA claims that the price increase has also helped prevent further accumulation of circular debt in the petroleum sector.
A hearing on the gas tariff hike was conducted, allowing stakeholders to present their perspectives. Following this session, Chairman OGRA outlined plans for the next hearing in Peshawar, after which recommendations will be forwarded to the government. Khan underlined the global trend of soaring gas prices, indicating the likelihood of further increases locally.
The initial hike in gas prices was explained by caretaker Energy Minister Muhammad Ali, who highlighted the longstanding issue of inadequate gas production compared to demand. Ali pointed to the increased need for imported gas due to this shortfall. He highlighted the substantial difference in cost between domestic and imported gas, citing the financial strain on gas suppliers.
Emphasizing the impact of the price increase, Ali noted a significant reduction in circular debt within the petroleum sector following the adjustment in gas prices, averting an annual loss of an estimated Rs 400 billion.
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FAQs
Pakistan's government has increased gas prices for the second time in just four months to improve the financial health of gas companies affected by subsidy-related debt and to satisfy conditions laid out by the International Monetary Fund to qualify for the next tranche of loans.
Which is the largest producer of natural gas in Pakistan? ›
The Largest Gas Producing province of Pakistan is Baluchistan. The Sui gas field is the biggest natural gas field in Pakistan. It is near Sui in Balochistan. The gas field was discovered in the late 1952 and the commercial exploitation of the field began in 1955.
Did Pakistan push up natural gas price ahead of IMF review? ›
ISLAMABAD, Oct 31 (Reuters) - Pakistan announced on Tuesday a sharp increase in the price of natural gas for most households and industry ahead of the cash-strapped country's first review of a $3 billion International Monetary Fund (IMF) bailout.
How much is the gas cylinder price in Pakistan? ›
As of March 2023, it charges Rs3,030 as LPG gas prices. So, a consumer can get the SNGPL LGP cylinder filled with gas for Rs12,300 in Lahore, Rawalpindi and other cities. You can book the SNGPL LPG Cylinder by clicking here. According to Ogra, the notified price of 11.8 kg cylinder stands at Rs3,030.25.
What is the problem of gas in Pakistan? ›
With 30.6 billion cubic meters of natural gas, Pakistan shares 0.8 % of global production (BP, 2021). There is a sharp increase in gas demand in Pakistan, but due to the inefficient distribution of natural gas resources, Pakistan has been facing a colossal gas shortfall.
How much gas is left in Pakistan? ›
Summary Table
| Million Cubic Ft (MMcf) | Global Rank |
|---|
| Gas Reserves | 24,700,000 | 29th in the world |
| Gas Production | 1,454,978 | 26th in the world |
| Gas Consumption | 1,436,261 | 21st in the world |
| Yearly Surplus | + 18,717 | |
3 more rowsIMF's dogmatic reliance on higher interest rates to contain inflation and attracting capital inflows to build reserves has proved unsuccessful, because private-sector spending in Pakistan, unlike in more developed economies, isn't driven by credit, while short-term inflows are unstable for Pakistan, with long-term ...
How much did IMF give Pakistan? ›
Islamabad, Pakistan – When Pakistan reached yet another staff-level agreement (SLA) with the International Monetary Fund (IMF) in July for a $7bn, three-year loan programme, it was hailed as a lifeline for both the government, which had assumed office only months before, and the country itself, which was reeling under ...
Which is the safest gas cylinder in Pakistan? ›
BGC Cylinders are the best choice for your gas storage needs, offering unbeatable safety, durability, and user-friendliness.
Is a fiber cylinder safe? ›
Are the BGC fiber composite cylinders safe to use in all environments? Yes, BGC cylinders are designed to be safe for various environments, including residential, industrial, marine, and outdoor settings.
The Oil and Gas Regulatory Authority (Ogra) on Friday announced a cut in price of liquefied petroleum gas (LPG) for June 2024. A notification issued by the regulatory authority states that LPG price has been decreased by Rs3. 86 per kilogramme to Rs234. 59 per kg.
Why fuel prices are rising in Pakistan? ›
Inflation has quickened in Pakistan, impacted by higher energy costs. Pakistan government recently raised petrol and diesel prices sharply, citing volatility in international prices. The Pakistani government has announced another hike in petroleum prices, adding to the public's financial burden amid rising inflation.
Why prices are rising in Pakistan? ›
The Finance Bill 2024 proposes a range of indirect taxes that are anticipated to escalate inflation in the coming weeks. Notably, an 18 per cent sales tax is projected to impact prices of pharmaceuticals, books, stationery, and poultry products, as reported by Dawn.
How can I reduce my gas bill in Pakistan? ›
Cooking management:
- Use proper-sized pots and pans that match the burner size to prevent energy waste.
- Use lids on pots and pans to cook faster and reduce gas consumption.
- Use a pressure cooker instead of traditional methods to cook the food.
- Regularly and properly clean your burner and stove.
The recent tax memorandum for FY25 outlined a sharp rise in the PDL on locally produced LPG from Rs4,669 per tonne to a new minimum of Rs30,000. Additionally, the government has imposed an 18pc sales tax on imported LPG, which makes up approximately 65pc of the market supply.
