Gas Prices Set to Surge by 50% Starting Next Week
The Ministry of Energy has announced a significant increase in gas prices, with rates set to rise by over 50% from the coming week, in accordance with an agreement with the International Monetary Fund (IMF). The price hike is scheduled to take effect on July 1.
Sui Northern Gas Pipelines Limited (SNGPL) will see its tariff go up by Rs415 per MMBTU, while Sui Southern Gas Company Limited (SSGC) will witness an increase of Rs417 per MMBTU. The Oil & Gas Regulatory Authority (OGRA) has already granted approval for the price hike, pending final decision by the federal government.
Officials from the Ministry of Energy have cited staggering annual losses of approximately Rs350 billion in the gas sector, contributing to a total circular debt reaching Rs2,700 billion. This financial strain has led to several exploration firms exiting the country over the last 13 years. Consequently, Pakistan has become increasingly reliant on Regasified Liquefied Natural Gas (RLNG) imports, especially during the winter months.
The Ministry further revealed plans to eliminate the difference in import tariffs between LNG and natural gas. Addressing the issue, Energy Minister Muhammad Ali disclosed that the country has been incurring an annual loss of Rs300 billion in the gas sector and stressed the need for initiatives to discover new sources of oil and gas.
