6 Feb 2024
The Oil and Gas Regulatory Authority (OGRA) on Tuesday approved another surge in gas tariffs as a strategy to counter a substantial shortfall of Rs98 billion affecting the nation's economy.
This latest adjustment, effective from January 1, 2024, until June 30, 2024, adds to the challenges faced by citizens already struggling with unprecedented inflation rates. This marks the second alteration in gas prices within the ongoing financial year 2023-24.
The government's decision impacts both Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), with SNGPL experiencing a significant increase of 35.13 percent in tariffs and SSGCL's rates elevated by 8.57 percent.
OGRA's proposal on February 2 recommended a notable hike, pushing the average gas price to Rs1,590 per MMBTU, up from the previous rate of Rs1,291 established in June 2023.
This adjustment is a response to pressure from the International Monetary Fund (IMF), urging biannual revisions to gas prices to alleviate the mounting circular debt.
Under OGRA's recent decision, Sui Northern gas tariffs surged to Rs1,673.82 per MMBTU, a substantial increase from the previous rate of Rs1,238.68. Similarly, Sui Southern's gas tariffs increased to Rs1,466.40 per MMBTU, up from Rs1,350.68 per MMBTU.
The government's approval of this tariff hike has generated mixed reactions within society. While some argue it is a necessary step to address economic challenges, others express concern about its impact on the already burdened populace.
As inflation rates soar, the affordability of essential utilities becomes a pressing concern for ordinary citizens. In the face of economic uncertainties, the debate surrounding the efficacy of such measures continues to intensify, highlighting the need for comprehensive strategies to address Pakistan's economic challenges while safeguarding the interests of its people.