Federal Minister for Petroleum Ali Pervaiz Malik has said that soon good news will be announced for the gas consumers as the government is planning to revise or reduce gas tariff based on relatively cheaper locally produced natural gas.
During recent tension in the region and the conflict between the United States, Israel and Iran, the supply of liquefied natural gas (LNG) was temporarily limited but since then, the production of locally sourced gas in the power sector has been substantially ramped up, the minister said.
The local gas price is about Rs2,000 per one million British thermal unit (MMBTU), while the imported LNG price is some Rs3,500 per MMBtu, he said. This disparity has led to less cost burden on consumers.
The government is going to present a summary to the federal cabinet about new gas pricing and how it will be implemented, before selecting a formal decision, says Ali Pervaiz Malik.
The minister also said that the energy system remained stable during the period of LNG disruption, thanks to the increased domestic gas production of approximately 400 million cubic feet per day to meet the country’s energy requirements.
The government is also considering several proposals to tackle the long pending issue of circular debt in the gas sector, with the aim of improving the financial health of energy firms and lessen their overhanging debt, he added.
Some experts think that if the savings on local gas can be felt directly by consumers, both domestic and commercial, they might reap benefits, as could financial pressures on the energy industry.
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