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Thursday, February 15, 2024

Government Raises Gas Prices Amidst Inflation

Effective from January 1, 2024, to June 30, 2024, these revised rates add to the challenges faced by citizens already struggling with high inflation rates.

The Oil and Gas Regulatory Authority (Ogra) has approved another increase in gas tariffs on Tuesday, aiming to address a significant shortfall of Rs98 billion affecting the nation’s economy. Effective from January 1, 2024, to June 30, 2024, these revised rates add to the challenges faced by citizens already struggling with high inflation rates. This marks the second adjustment in gas prices during the current financial year 2023-24.

The government has decided to raise the tariffs for both Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL). SNGPL will experience a substantial increase of 35.13 percent, while SSGCL’s rates will rise by 8.57 percent.

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Ogra’s proposal on February 2 recommended a significant hike, pushing the average gas price to Rs1,590 per MMBTU, up from the previous rate of Rs1,291 established in June 2023.

This adjustment is in response to pressure from the International Monetary Fund (IMF), which has been urging biannual revisions to gas prices to tackle the growing circular debt.

According to Ogra’s recent decision, Sui Northern gas tariffs have risen to Rs1,673.82 per MMBTU, a substantial increase from the previous rate of Rs1,238.68. Similarly, Sui Southern’s gas tariffs have increased to Rs1,466.40 per MMBTU, up from Rs1,350.68 per MMBTU.

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The government’s approval of this tariff hike has sparked mixed reactions from different segments of society. While some argue it’s a necessary step to address economic challenges, others are concerned about its impact on the already burdened populace.

With inflation rates on the rise, the affordability of essential utilities becomes an increasingly pressing concern for ordinary citizens. As the nation faces economic uncertainties, the debate over the effectiveness of such measures continues to intensify, highlighting the need for comprehensive strategies to address Pakistan’s economic challenges while safeguarding the interests of its people.