LAHORE MIRROR — The Ministry of Petroleum has formulated a strategy to address the ongoing debt challenges within the gas sector by proposing an increase in gas prices ranging from 55 to 60 per cent.
The plan’s execution is contingent upon receiving approval from the federal cabinet.
Central to this proposal is the establishment of a uniform national gas price across the entire country, calculated based on the weighted average cost of gas. Consequently, consumers from all regions will be subject to the same gas price, regardless of their location.
At present, domestic gas is priced at $8 per mmbtu, while the cost of imported LNG stands at $13 per mmbtu. The plan seeks to narrow the current $5 price disparity between these two forms of gas, with the aim of addressing the gas sector’s lingering debt.
Additionally, the proposal entails strategies to curtail the consumption of LNG in the production of fertilizers. Currently, fertilizer manufacturers enjoy reduced rates for LNG usage. However, the new plan will require these producers to pay the full market price for their LNG requirements.
The plan’s execution will commence once it secures the green light from the federal cabinet and after engaging in consultations with the provinces.
Although the impending implementation of this plan is likely to result in higher gas bills for consumers, the government asserts that these measures are indispensable for resolving the gas sector’s debt crisis and ensuring the industry’s long-term viability.
