The northern part of the country has now long been used to of gas pressure and supply issues in winters. This winter, the southern brothers and sisters have started to share their pain too, as complains of low pressure and gas load shedding have grown.
This should not surprise anyone. There will not be enough gas to flow through the pipelines in the next few years. Or at least not the one at the rates everyone is so used to. Consumers at large, are still unaware that Pakistan is fast running out of gas, and it is sooner than later that they will have to opt for alternative fuels for cooking and other heating purposes. Much like majority of the countrymen do anyways.
As the urban consumer takes the pipeline gas at dirt cheap rate for granted, little does she know the rural counterpart pays at least thrice as much for heating. Firewood is the biggest fuel source for heating in Pakistan. For rural Pakistan’s bottom two income quintiles, the usage even surpasses that of electricity. The market size is estimated at around Rs300 billion–more than 2.5 times the domestic natural gas market size.
Even by the most lenient estimate, burning firewood today costs $6.5/mmbtu. The cost has gone up 70 percent since FY19. Considering that the fuel is largely used by consumers in the lower income brackets, this is quite an increase, and there is no subsidy to look out for. The natural gas consumers connected with the extensive pipeline network, on the other hand, have continued to pay the same price for the last four years. Zero increase – regardless of the end of consumption spectrum.
For the lowest consumption bracket, pipeline gas costs less than a dollar per MMBTU. That is the closest comparison to the bulk of firewood users, who are paying seven times more for their heating requirements. Only the gas consumer in the highest consumption slab pays as much as the firewood user at $6.5/mmbtu. Average domestic natural gas price at $2/mmbtu is still three times lower than firewood. Talk about ironies.
The use of cylinder gas using LPG has also steadily increased beyond commercial reasons. It remains an expensive affair at most times. At current rate of $22/mmbtu, the LPG heating cost is higher than all fuel sources other electricity at national uniform average tariff ($25/mmbtu). The disparity for heating cost has never been more glaring than the last few years.
Respective governments have chickened out on taking decisions as simple as passing on the cost of gas to the end consumer. Even imported gas at four times the price, is being supplied at subsidized rates. The payables have kept on mounting – close to Rs1 trillion alone for gas. Surely, when the lowest income quintile can pay multiple times as much for heating – the urban consumers should not continue to be shielded at such high economic and social costs.
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