The election year gas pricing

Quite contrary to what is being termed a ‘substantial increase’ and a ‘gas price bomb shell’ on the masses, Ogra has rather been too lenient this time around. The consumer gas prices effective from January 1, 2013 for six months have been increased across the board for all categories by just 6.1 percent from the previous rates.
Not that anyone expected the government to act rationally while pricing the fast-depleting precious natural resource, especially with the general elections just round the corner. Ever since Dr Asim Hussain assumed the office, gradual price rationalisation of natural gas has been his favourite topic.
Now with the last chance to act rationally gone begging, it could be officially said the government has plainly failed to live up to the earlier promises of reforming the energy sector. The ‘reforms’ have been largely limited to cosmetic measures, such as changing and chopping the heads of a few distribution companies. It is otherwise an empty cupboard.
In fact, the government had backtracked on its stance right after the federal budget FY13, withdrawing the Gas Infrastructure Development Cess from most slabs. The imposition of GIDS was one of the very few steps that seemed the right thing to do, but it did not go down well with the authorities at the helm, and the good work was wiped off in just six months’ time, bringing the gas price rationalisation back to square one.
It is rather unfortunate that for a country where importing LNG is a key ingredient in the near-term energy sufficiency plan, there are no efforts towards narrowing the gap between local and imported energy. Had the January 2012 gas prices remained in place, Pakistan would have been well on track to import LNG, with much less trouble around thinking about the local gas prices. It is no rocket science that without narrowing the gap between local and imported price, importing LNG would remain a distant dream.
Moreover, the practise of using the same yardstick for all user categories is highly uncalled for, as pricing should go hand in hand with priorities. To raise the prices for domestic, industrial and CNG users, by a same percentage lacks rationale. Naturally, the government would be least interested in meeting the budget targets for this fiscal year, which is why the collection of gas cess has taken a backseat and the loss of Rs30 billion to the government’s kitty seems almost sure.