Islamabad: Natural gas prices are set to increase in Pakistan, impacting both households and businesses that are already facing a severe gas crisis in the winter months.
The Oil and Gas Regulatory Authority (OGRA) has allowed two gas companies — Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) — to hike their prices by 74.42 per cent and 75.35 per cent, respectively. The decision allows SNGPL to raise its average prescribed gas prices by Rs406.28/mmBtu (Metric Million British Thermal Unit) and SSGCL to increase its average prescribed gas rates by Rs499.28/mmBtu.
The decision has been forwarded to the federal government for approval. The government would have to decide on it within 40 days or it will automatically come into effect. “The federal government shall ensure that the sale prices so advised are not less than the revenue requirement [of the companies] determined by the authority,” OGRA said.
Impact on consumers
The increase will affect domestic consumers the most, with some seeing their rates triple. The average prescribed gas price for SNGPL consumers has been increased from Rs545.89/mmBtu to Rs952.17/mmBtu. Additionally, the average prescribed gas price for SSGCL consumers has been increased from Rs662.63/mmBtu to Rs1,161.91/mmBtu.
The regulatory authority has abolished the earlier slabs of gas consumption for different groups of consumers and fixed a uniform rate for all categories including domestic, tandoors (bakers), commercial, general industries, and export-oriented industries. “The lower slabs who consume less and are almost poor consumers are most affected as their gas prices have been tripled, while for the higher slabs, the prices have been literally reduced” according to Pakistani media.
The decision comes as Pakistanis are grappling with higher costs of living with fuel and food price hikes this year. The prices of essential food items skyrocketed as the purchasing power of the people continues to shrink amid an ongoing economic crisis in the country of 220 million.
Gas outages in Pakistan
Winters always intensify gas shortages in Pakistan. This time, even the southern city of Karachi, which does not get as cold as the northern region, is experiencing severe gas loadshedding. Many citizens of Karachi complained that there is simply no gas to cook food even at the promised meal times. The SSGC had earlier announced the availability of gas during three meal times — breakfast, lunch, and dinner. The situation is worsening every year as experts say that local gas production was declining at the rate of 10 per cent every year.
Pakistan is one of the most gas-intensive countries in the world where natural gas was made available to households at dirt-cheap prices for years. The country is now witnessing shortages and load shedding, forcing Pakistan to explore indigenous resources and import liquefied natural gas to meet energy needs.
