In a recent meeting of the Economic Coordination Committee (ECC), the government approved a substantial increase in the gas tariff for captive power plants, raising the rate from Rs. 3,000 per metric million British thermal unit (mmbtu) to Rs. 3,500 per mmbtu. This revision is aimed at ensuring the necessary revenue generation for the gas sector in FY 2024-25 while addressing energy sector challenges.

However, in a move to shield domestic consumers, the ECC decided not to raise gas prices for non-protected domestic slabs, providing much-needed relief to households amid rising inflation.

Details of the ECC Meeting

The meeting was chaired by Federal Minister for Finance Senator Muhammad Aurangzeb, with other prominent officials in attendance, including:

  • Federal Minister for Petroleum Mr. Musadik Masood Malik
  • Minister for Power Sardar Awais Ahmed Khan Leghari
  • Minister of State for Finance and Revenue Mr. Ali Parvez Malik
  • Chairman OGRA, Chairman SECP, and senior officials from various divisions.

The session included a thorough discussion on the summary presented by the Petroleum Division, highlighting the financial challenges faced by the gas sector and the need for tariff adjustments.

Key Decisions Made by the ECC

  1. Increase in Gas Tariff for Captive Power Plants
    • The tariff for captive power plants was increased by Rs. 500 per mmbtu, bringing it to Rs. 3,500 per mmbtu.
    • This adjustment is aimed at achieving revenue targets and enhancing efficiency in the energy sector.
  2. Protection for Domestic Consumers
    • The ECC decided against increasing gas prices for non-protected domestic slabs, citing the financial burden on households as a primary concern.
  3. Grid Transition Levy
    • The Petroleum Division was instructed to implement a grid transition levy on captive power plants. This measure aims to encourage efficient energy use and reduce reliance on non-renewable energy sources.

Implications of the Gas Price Hike

The increase in gas tariffs for captive power plants is expected to have a significant impact on industries reliant on captive power generation. This may lead to higher operational costs, which could trickle down to the end consumer in the form of increased product prices. However, by sparing domestic consumers from higher tariffs, the government has taken a balanced approach to mitigate public discontent.

Government’s Vision for Energy Efficiency

The decision to impose a grid transition levy reflects the government’s focus on modernizing the energy sector and reducing inefficiencies. Transitioning industries to more sustainable energy sources is a long-term goal that could pave the way for a more stable energy landscape in Pakistan.

For more updates on Pakistan’s energy policies and global energy trends, visit the International Energy Agency (IEA).

Topics #Breaking #featured #Gas Price Hike #News #Pakistan #trending pakistan #Updates