The Energy Minister of Pakistan announced a major policy change: new gas connections would no longer be approved, citing reasons such as impracticality and economic feasibility.
The Caretaker Energy Minister of Pakistan has announced a major policy change: new gas connections would no longer be approved, citing reasons such as impracticality and economic feasibility. This declaration, issued in Islamabad, marks a sea change in the nation’s energy environment.
Energy Minister emphasized that within the next one to two years, domestic gas connections will transition to Liquefied Petroleum Gas (LPG), marking a departure from conventional natural gas supply for households. He clarified that henceforth, gas will be exclusively directed towards power plants, aligning with international practices.
One of the pivotal assertions made by the caretaker minister was that the surge in gas prices will not escalate the existing circular debt within the sector. This strategic move aims to fortify the financial stability of the gas industry. Minister assured that international gas companies will remain invested in the country, buoyed by this initiative, which is poised to augment gas production.
To shield the agricultural sector, the gas price for the fertilizer industry has been left unaltered, preventing an undue burden on farmers. Moreover, the energy minister affirmed that industrial gas prices will be on par with those of neighboring countries, fostering a competitive environment conducive to industrial growth.
Minister underscored the imperative to rectify the prevailing circular debt, which stands at a staggering 4,500 billion rupees. Through this bold policy shift, the government endeavors to recalibrate the economic dynamics of the gas sector, ensuring its sustainability and long-term viability.
In a bid to alleviate the impact on lower-income segments, the energy minister revealed that measures have been instituted to shield them from the brunt of gas price hikes. Notably, a 57 percent increase in tariffs has been levied on domestic consumers, with this demographic accounting for 31 percent of total gas usage.
Crucially, the tariff for the highest gas consumers has been adjusted to align with LPG rates, promoting fairness and equity within the system. This move is poised to instill a sense of parity and balance among consumers, regardless of their usage patterns.
As Pakistan steers towards a future reliant on LPG for domestic consumption, this paradigm shift in energy policy marks a decisive step towards a more sustainable and economically sound gas sector. With an eye on global best practices, the government’s move is anticipated to pave the way for enhanced gas production and a more competitive industrial landscape in the country.