ISLAMABAD: Ahead of the Executive Board meeting of the International Monetary Fund (IMF), Pakistan has been given a 45-50 percent hike in the sale price of gas and Rs 3.50 to Rs 4 in the basic electricity tariff for the fiscal year 2023-24. An increase to the unit must be reported. Due on July 12.
A senior energy ministry official told JEE News that the increase in energy prices would pave the way for a $3 billion staff-level program with the IMF under the Standby Arrangement (SBA).
“The Oil and Gas Regulatory Authority (OGRA) on June 2 announced a 50% (Rs 415.11 per MMBTU) hike for customers of Sui Northern Gas Pipeline Limited (SNGPL), bringing the subscribed gas price to Rs 1,238.68 per mMBTU. Extended to MMBTU. MMBTU,” the official said.
“The regulator also hiked gas price by 45% (417.23 per MMBTU) for customers of Sui Southern Gas Company Limited (SSGCL) for 2023-24. However, the government has yet to increase the gas price for the fiscal. Not reported. Year 2023-24.”
“SNGPL still has a shortfall of Rs 560.378 billion from last year till FY23, while Sui Southern has a shortfall of Rs 97.388 billion,” he added.
Last time, the federal government had notified a hike in category-wise gas sales prices from January 1, 2023. Under the government’s current policy, high-end consumers are providing cross-subsidies to low-end consumers.
“The government is most likely to continue with the policy whereby high-end customers will pay the same price as low-end customers from July 1, 2023.”
He said that the entire energy sector is trapped in a revolving debt of Rs 4,300 billion (Rs 1,700 billion in the oil and gas sector and Rs 2,600 billion in the power sector).
The top IMF delegates want the Pakistani authorities to increase the rebase tariff for the fiscal year 2023-24 to make the energy sector viable and sustainable.
Nepra may soon announce rebase tariff from Rs 3.5 to Rs 4 per unit, effective from July 1, 2023. The government will then inform him.
However, the most worrisome part of the base tariff is the payment of capacity charges, whose share in the base tariff has increased from 57 per cent to 63 per cent in the next financial year.
End-users are expected to pay Rs 1.3 trillion to Rs 1.5 trillion in capacity payments in the financial year 2022-23 ending June 30, well-placed officials in the power ministry told JEE News.
Next year, the volume of capacity payments will increase by another Rs 1 trillion, taking it to Rs 2.5 trillion, officials said. Thus the share of capacity payments in the base tariff alone will increase to 63%.
“According to the authorities, the installed capacity of the country has increased to 44,000 MW but as per Economic Survey 2022-23 it is 41,000 MW, next year about 1,500 MW will be added and thus more capacity charges will be paid to consumers. Will have to.”
The base tariff is Nepra’s fixed tariff, which is Rs 24.80 per unit for the financial year 2022-23.
However, the government has noted it at Rs 24 per unit. If the proposed increase is added, the base tariff for FY24 will rise to Rs 29 per unit.
However, the basic tariff does not include surcharges, taxes and duties, as the imposition of taxes, duties and surcharges is the sole authority of the federal government.
The Power Purchase Price (PPP) constitutes 90 percent of the tariff, of which capacity charges will account for 63 percent.
Currently, the power sector has become virtually unsustainable as its revolving debt has exceeded Rs 2.5 trillion, and the government has been paying powerhouses for power purchased from them, high system losses, low recoveries and inadequate budgets. Can’t pay. Subsidy
