Energy ministry to seek cabinet’s approval for gas tariff hike

ISLAMABAD: The Ministry of Energy is most likely to seek an approval from the federal cabinet that meets today (Tuesday) for a hike in the price of gas for the export sector by $2.5 per mmBtu to $9 per mmBtu from $6.5 per mmBtu.

However, top sources said that this proposal, prepared under the patronage of Energy Minister Hammad Azhar with the endorsement of Adviser to the Prime Minister on Finance Shaukat Tarin, may not sail through easily as Adviser to the Prime Minister on Commerce and Textile Abdul Razak Dawood is reportedly prepared to oppose the proposal with all arguments in favour of the existing tariff of $6.5 per mmBtu to maintain the upward growth in the exports, otherwise the regional competing economies will capture the market of Pakistani products in Europe and US. The sources said that the federal cabinet is most likely to witness the heated debate on the proposal of the energy ministry.

The sources further said that the Ministry of Energy wants to charge $ 9 per mmBtu for gas from the Punjab-based industry, while it will continue to charge $ 4.47 per mmBtu from the Sindh-based industry. Executive Director of All Pakistan Textile Mills Association (APTMA) Shahid Sattar said: “This is highly discriminatory and will lead to closure of mills and large-scale unemployment in Punjab.” He said the textile exports increased by 27 percent in the first four months of the current fiscal year, up by $ 7.5 billion in the FY22 from 2017-18, adding: “And this is by any standards a phenomenal achievement.” He said that the industry has delivered to the nation by investing Rs450 billion in planting the new machinery for capacity enhancement for export-led growth as per the commitment. This has resulted in an increase of $ 500 million in the exports every month in the FY22 so far, he said, adding 100 new textile units are being set up across Pakistan and 90 percent of them in Punjab are creating millions of jobs.

The executive director said with the Ministry of Energy’s move to increase the gas rate for the export industry, the exceptional progress, job creation and export-led growth will be jeopardised and the government’s crowning achievement will get nullified.