ISLAMABAD: The government has begun work to introduce a new gas price determination mechanism, either on a monthly or quarterly basis, instead of the current biannual system.
“This directive was issued by the 20-member task force, headed by Deputy Prime Minister Ishaq Dar, in its last meeting. The rationale behind shifting to a monthly or quarterly gas price determination formula is to mitigate the further accumulation of circular debt, which stood at Rs2.7 trillion as of March 2024,” a senior official from the energy ministry told The News.
The petroleum division, according to the official, has been tasked with submitting recommendations for necessary amendments to the OGRA Ordinance, paving the way for the new gas pricing mechanism. Currently, gas prices are determined biannually—on July 1 and January 1.
However, there is an ongoing debate within the petroleum division, as some senior officials favour the existing pricing mechanism. They argue that the Petroleum Concession Agreements (PCAs) with Exploration and Production (E&P) companies are based on the biannual price determination mechanism, not a monthly or quarterly system. Despite this, Federal Petroleum Minister Musadik Malik supports the introduction of a monthly or quarterly gas tariff determination mechanism, believing it would help contain the circular debt, which has become a larger burden than the power sector’s circular debt, now at Rs2.665 trillion as of May 2024.
Police official who gunned down blasphemy accused in police lockup in Cantt police station had been arrested by police...
CM criticised appointment of a PPP member as governor, claiming KP was being used as a testing ground for political...
A three-member bench of the apex court headed by Justice Syed Mansoor Ali Shah heard the matter related to climate...
Hamid said proposed national convention being held today was to reject proposed constitutional amendment
Iman Mazari appeared in court where police submitted their report on location of Muhammad Akram
Aleema expressed concern over country’s economic and political instability, claiming system is on verge of collapse