The government has decided to stop all the ongoing schemes and issuance of new domestic gas connections, Federal Minister for Energy, Hammad Azhar, has revealed.
Addressing a press conference, the Minister said that the government has also decided to formulate a new mechanism to proportionately charge domestic consumers against the consumption of imported gas.
Local gas reserves depleting at a rate of 9% per annum. Govt does not have legal mechanism to collect costs of imported gas from consumers. We have forged a consensus on new pricing mechanism but till its legislation, govt is halting all expansion in domestic gas networks.— Hammad Azhar (@Hammad_Azhar) October 15, 2021
He added that the government does not have any legal authority to collect the cost of imported gas from domestic consumers. Therefore, the ongoing schemes and issuance of new domestic gas connections will not resume until the new mechanism comes into effect.
The Minister revealed that the reserves of local gas are depleting at a rate of 9% per year. It is so high that the commodity has now become insufficient to be supplied to power, export, fertilizer, and other sectors.
This fact prompted the government to enforce a mechanism to charge domestic consumers for using imported gas.
He said that only 28% of domestic consumers receive local gas and the remaining receive imported gas. The local gas costs around $3 MMBTU while the imported gas costs around $10 MMBTU.
However, all domestic consumers, regardless of the fact whether they receive local or imported, are charged against the rate of local gas, causing the national exchequer to lose billions of rupees each year.