Islamabad, Nov 12: The federal government has decided to allocate Rs. 163 billion to redirect imported liquefied natural gas (LNG) from the power sector to residential consumers due to reduced electricity demand, according to sources in the Petroleum Division.
This move is aimed at balancing seasonal demand but will require a large amount of public funds. It is also expected to ease pipeline pressure caused by the daily addition of imported gas.
The power sector had previously used up to 600 million cubic feet (MMCF) of LNG, but the shutdown of captive power plants has created a surplus of around 150 MMCF of LNG.
This change may impact the Rs. 400 billion revenue the gas sector earned from captive power.
Additionally, the government plans to raise gas tariffs starting in February 2025 to narrow the price gap between imported LNG (Rs. 3,500 per MMCF) and domestic gas (Rs. 1,550 per MMcfd).
Closing this tariff gap could increase government revenue by up to Rs. 200 billion. Fertilizer companies are also expected to face higher tariffs as the government works towards ensuring fiscal sustainability across sectors.
