Pakistani Government Plans Additional Gas Tariff Slabs to Reduce Circular Debt
The Pakistani government is considering introducing additional gas tariff slabs to provide cheaper gas to consumers by bringing more people under the protected category net.
According to a recent meeting of the Cabinet Committee on Energy (CCOE), chaired by Prime Minister Shehbaz Sharif, the Ministry of Energy (Petroleum Division) revealed that the evaluation carried out by the World Bank and advisory firm KPMG highlighted a substantial addition to the debt between 2019 and 2023 primarily due to no increase in consumer gas prices and diversion of RLNG to domestic consumers.
The CCOE has directed the Ministry of Energy (Petroleum Division) to examine the proposal of introducing a more rational categorisation of protected consumers in the gas sector, with a list of key factors contributing to the circular debt including delayed revision in consumer gas prices, low recoveries owing to the power sector, and diversion of RLNG to the domestic sector.