ISLAMABAD: The federal cabinet has not yet approved the recommendation to raise gas rates approved by the Economic Coordination Committee (ECC) of the Cabinet.
The ECC held on 8 July partially approved the hike in gas tariff for different slabs ranging from 43 to 353 percent and reduced the slabs from seven to five. The federal cabinet is expected to take up the matter shortly, informed sources told Business Recorder.
Under OGRA’s Amended Act, there is a defined period of 40 days after determination of tariff by the regulator following which the determined tariff would automatically become applicable. The amendments in the OGRA Ordinance have deprived the government of the power to freeze or partially pass on gas price rise on to the consumers.
The amendments, pledged to the International Monetary Fund (IMF), have the objective of arresting the flow of circular debt which has reached an alarming Rs 800 billion, an official of OGRA told this correspondent on the condition of anonymity.
On July 8, 2022, Minister for State (Petroleum Division) Musaddiq Malik said that his ministry had prepared a framework, comprising suggestions targeting to protect 50 per cent of the country’s population, constituting the poorest of the poor, from the gas price hike to be revised/ determined by OGRA under the new law.
The suggestions would be presented to the federal cabinet for consideration and approval; however, it would be the prerogative of Prime Minister Shehbaz Sharif to take the final decision, he added.
Petroleum Division in collaboration with Oil and Gas Regulatory Authority (OGRA) has reportedly drafted a framework further amending the draft approved by ECC to protect lifeline and low income consumers.
Copyright Business Recorder, 2022