International Monetary Fund (IMF) urged Pakistan government to raise the gas tariff for captive power plants (CPPs) to match the cost of regasified liquefied natural gas (RLNG) starting on July 1, 2024.
“The only choice available to the government is to raise the price of gas for captive power plants to match the RLNG costs. The majority of the CPPs are located in the Sui Southern network, and these plants have an efficiency of 30–35%, as per local media.
The government officials said to local media that because many CPPs are not linked to the national grid, they had requested an extension from the IMF until December 2024 to convert the CPPs to national electrical systems. But according to the IMF, the job should be finished by June 2024, at which point their tariff would climb to match the price of RLNG and become effective on July 1st, 2024.
“At the moment, captive power plants pay Rs 2,750 per MMBTU for gas. The aforementioned facilities use natural gas as an input fuel to produce electricity for industrial use, and some of them also sell the electricity they produce to electric power distribution companies (DISCOs).
Sui Northern requested for a significant rise of Rs2,646.18 per MMBTU starting July 1, 2024, putting the gas price at Rs4,447 per MMBTU. Sui Southern had requested an increase in gas prices of Rs274.4 per MMBTU. The gas firms have requested a significant rise starting on July 1, 2024, and have included the Rs 600 billion gap from past years in their applications. According to government sources, Ogra is expected to propose a small rate rise of 10-15%, which would affect around Rs 100-150 billion in tariffs. This is in contrast to the high expectations expressed in the petitions filed by Sui gas businesses.
