Islamabad, Jan 2: The federal government is preparing to raise gas prices for captive power plants by up to Rs. 1,100 per MMBtu, pushing the cost to over Rs. 4,000 per MMBtu. This price adjustment is part of the International Monetary Fund (IMF) conditions to align the cost of regasified liquefied natural gas (RLNG) with its full import cost.
Key Details:
- Current Pricing: Currently, Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) supply gas to 1,180 captive power plants, consuming a combined 242 MMCFD of locally produced gas and 156 MMCFD of imported RLNG.
- IMF’s Demand: The IMF has insisted on the withdrawal of various incentives provided to power producers, urging the government to align domestic gas prices with international market rates. This price hike is in line with similar increases seen in June 2024 under the IMF program aimed at eliminating energy subsidies.
- Impact: The revised gas pricing will be implemented this month, with a report to be shared with the IMF during the upcoming economic review. Failure to comply with this adjustment could delay the next tranche of the IMF’s $7 billion bailout program, potentially jeopardizing the government’s commitment to the IMF’s terms.
The gas price hike for captive power plants is a critical step toward complying with the IMF’s terms. The move is expected to help the government align energy prices with global standards but could also put additional pressure on power producers reliant on RLNG.
