In a recent move, Pakistan’s Economic Coordination Committee (ECC), a body under the federal cabinet, has decided to increase gas prices for industrial consumers while keeping the rates unchanged for domestic users. This decision, made in a meeting held recently, outlines the new energy pricing policy aimed at addressing sectoral energy needs.

Key Changes in Gas Pricing

According to the new notification issued by the government, gas tariffs for captive power plants will see a significant rise. The price of gas for these plants will increase by 500 PKR per MMBTU, bringing the new rate to 3,500 PKR per MMBTU, up from the previous rate of 3,000 PKR per MMBTU.

This hike in prices specifically targets captured power plants, which are commonly used by industrial sectors to generate electricity for their own use. The adjustment is part of the government’s effort to streamline energy costs across the country, especially in key industrial sectors.

No Change for Domestic Consumers

While industrial tariffs have increased, gas prices for domestic consumers will remain unaffected. The government has decided that domestic users, as well as other sectors outside of the industrial captive power plants, will continue to enjoy the existing rates. This move is designed to provide relief to households during these challenging economic times.

Timeline for Price Adjustments

The new gas price adjustment for captive power plants will come into effect on February 1, 2025. According to the announcement, this increase will not impact the general public or other industries at this point in time.

Broader Energy Sector Reforms

This move follows a series of decisions aimed at energy sector reforms in Pakistan. The government is attempting to balance the rising energy demand while managing inflationary pressures. The increase in gas tariffs for industrial users is part of an effort to reduce fiscal deficits, ensuring that energy costs align more closely with the needs of the sector.

Regulatory Oversight

The Oil and Gas Regulatory Authority (OGRA) has also approved a further hike in gas tariffs for the broader energy market. This increase aims to manage the rising energy costs and secure a stable energy supply for future demands.

Government’s Stance on Energy Policy

The government’s efforts to increase gas tariffs are intended to ensure that the energy sector becomes financially sustainable while addressing the increasing demand for gas within the country. With rising energy consumption in industrial and commercial sectors, the increase in prices for captured power plants is seen as necessary to align costs with market realities.

Conclusion

The ECC’s decision to increase gas prices for captive power plants, while holding domestic rates steady, marks a pivotal shift in Pakistan’s energy pricing policy. By adjusting industrial tariffs, the government aims to foster a more stable energy sector, while continuing to provide relief for households that are struggling with high utility costs. This decision reflects Pakistan’s broader strategy to modernize its energy infrastructure and promote economic growth.