ISLAMABAD: The government has reallocated Rs82 billion from the profits of state-owned Sui gas companies, originally earmarked for reducing circular debt, to prevent an increase in gas tariffs and shield ordinary consumers from rising costs.
“We had allocated Rs100 billion of the companies’ profits for curtailing circular debt,” Minister for Petroleum Musadik Malik said. “Now, Rs82 billion will be used to prevent a gas tariff hike for ordinary consumers, ensuring that they aren’t burdened with higher utility costs,” he added.
This decision underscores the government’s priority to ease the financial burden on everyday gas users while addressing the pressing issue of circular debt in the energy sector. Prime Minister has rejected the proposal to raise gas prices by Rs100 per mmbtu for all categories of domestic consumers. The government will instead allocate Rs82 billion from funds designated for circular debt adjustments to offset the increase. Despite this, Rs18 billion remains available to address the circular debt in the petroleum sector, the Malik said while addressing a news conference here Monday.
The minister said that the Oil and Gas Regulatory Authority (Ogra) had recommended prescribed price at Rs1,770/mmbtu for domestic consumers, however, the proposal was turned down by the prime minister. This decision directly benefits the lower-income consumers, he said. Currently, low slabs domestic consumers are charged Rs200/mmbtu, a rate significantly lower than Ogra’s proposed amount.
The minister said that the cost of Natural gas has increased by around 70 percent since the PDM government, from Rs1050/mmbtu to Rs1770/mmbtu. The minister said that as per the directives of the prime minister, gas prices have not been increased for domestic consumers and several other key sectors. He added that 64 percent of gas consumers belong to economically weaker segments.
However, the gas sale price for the General Industry (Captive Power Plant) has been increased from Rs3,000/mmbtu to Rs3,500/mmbtu. He clarified that this price adjustment was part of an agreement signed by the previous government with the International Monetary Fund (IMF). The minister highlighted the government’s success in reducing gas theft and expressed optimism about further improvements.