The Economic Coordination Committee (ECC) of the Cabinet approved an upward revision in the gas tariff for industrial captive power plants but rejected a proposed hike for domestic consumers.
The decision was made during a meeting chaired by Federal Minister for Finance Senator Muhammad Aurangzeb, with key ministers and officials in attendance.
The ECC approved raising the gas tariff for captive power plants from PKR 3,000 to PKR 3,500 per MMBTU for the fiscal year 2024-25, aiming to ensure the required revenue for the gas sector.
However, the committee decided against increasing the tariff for domestic consumers to protect them from additional financial burden.
The ECC also directed the Petroleum Division to implement a grid transition levy on captive power plants to enhance energy sector efficiency.
This decision follows weeks of opposition from industrialists, who urged the federal government to reconsider the proposed gas price hike to protect export-oriented industries and small and medium enterprises (SMEs).
Earlier, SSGC and SNGPL had proposed to increase the gas prices as per their revenue requirements.
Accordingly, the Oil & Gas Regulatory Authority (Ogra) requested the federal government to increase gas rates by up to 26 percent to generate approximately PKR 847.33 billion during the current fiscal year
Under the new tariff structure, the average gas price is set at PKR 1,762.51 per MMBTU for Sui Southern Gas Company (SSGC) and PKR 1,778.35 per MMBTU for Sui Northern Gas Pipelines Limited (SNGPL).
The SME sector has faced significant losses over the past few years due to rising production costs, primarily driven by higher utility prices, including electricity and gas.
Additionally, increased taxation on the salaried class in the last budget has made it challenging for SMEs to retain competent human resources at current salary levels.
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