ISLAMABAD: Minister for State for Energy, Musaddiq Malik hinted that a proposal has been submitted to the federal government for allowing a massive increase in the price of gas across-the-board except lifeline consumers besides the relief to the general masses of reduction in crude oil prices will be passed in line with the agreement with the IMF.
In a press conference on Thursday, Musaddiq Malik, Minister of State (Petroleum Division) said that the circular debt of the gas sector reached Rs1,500 billion in addition to Rs2,500 billion electricity and Rs500 to 600 billion sovereign guarantees and financial losses of state-owned entities.
He maintained that a proposal for gas rationing or re-pricing of gas has been moved to Cabinet for final approval.
“The gas deficit is increasing manifold in winter (November-February) when gas in Sui Northern Gas Pipeline Limited (SNGPL) system is 670 mmcfd against a demand of 1,170 mmcfd and reliance on imported gas is increasing,” he added.
He assured that the burden of hike in gas prices would be passed on to rich and poor people would be provided system gas which was five times cheaper than LPG or subsidise rates.
The minister further said that the previous government had not left any gas management plan or sign long-term LNG contracts except with Qatar.
Lifeline consumers spared: PD proposes massive increase in gas prices
He said the previous government had the opportunity to sign long-term agreement at a time when the global price of LNG was $4 per mmbtu. He said that the rate of one LNG cargo was $12.5 million based on $4 per mmbtu, which reached to $138 million at present and no foreign country was willing to supply LNG on spot tender or long-term contract.
Responding to a question regarding a decline in petroleum price globally, he said that the prices of refined petroleum products was still the same despite, the price reduction recorded on crude oil and Pakistan was importing crude and refined products as local refineries capacity or EU countries were not enough to meet the global demand.
He further said that the agreements, the PTI government signed with the IMF had not left space to take a decision; however, the government would try its best to provide relief to the general masses.
He further alleged that the federal government had no choice to take any decision on gas prices after the promulgation of an amendment in the OGRA Ordinance, 2002, which allowed the regulator to notify gas prices within 40 days after forwarding its recommendations to the federal government.
Copyright Business Recorder, 2022