Equal Gas Rates

In order to reflect the true cost of gas and end the cycle of circular debts born out of failing to meet year-on-year revenue requirements, the Oil and Gas Regulatory Authority (Ogra) has advised the government to apply equal gas rates to all sectors. This would mean that all consumers will be charged Rs.854.52 per unit, irrespective of their socio-economic place in society. This is a reality that was expected to dawn upon Pakistan as each successive government failed to take hard decisions like revisions in rates, all the while refusing to solidify alternate sources of energy for the industries and people.

In an effort to reduce financial burden on the public, the federal government has been absorbing the losses gained through selling gas equitably, with monumental subsidies. The existing monthly rate is set at Rs.121 per unit; the authorities are pumping out more money than they are receiving. This enabled the shortfall to stand at a shocking Rs.265 billion in regards to SNGPL for the last year alone.

Clearly, we have created a system that can hardly be sustained in the future, especially keeping in mind the rate at which global prices of commodities like petroleum and gas are increasing. The Ogra insists that in order to mitigate losses in the future, equal rates must be applied even if it means that the domestic consumer will face a 606 percent increase in their per unit cost of gas.

At the same time, there is also a dire need to explore alternatives for what is becoming an extremely expensive energy source. Electricity would be a good substitute for gas but it seems as though Pakistan will face some trouble here as well.

Rural and urban areas across the country are experiencing loadshedding for at least eight to 16 hours a day, owing to the shortfall of 7000MW. We are unable to meet national demand, let alone make electricity the alternative power source for gas. While the path forward may seem unclear keeping all these realities in mind, what is unacceptable is neglecting the duty to provide for the needs of the people. Research and investment must go into viable solutions for this power crisis, and quickly so.

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