ECC approves gas tariff hike for captive power plants as domestic consumers spared

The Economic Coordination Committee (ECC) approved an increase in gas tariffs for captive power plants while keeping rates for domestic consumers unchanged. 

The decision was taken during a meeting on Saturday, chaired by Federal Minister for Finance Mohammad Aurangzeb.

The gas tariff for captive power plants has been raised from Rs. 3,000 to Rs. 3,500 per MMBTU, effective for the fiscal year 2024-25. 

This measure aims to generate the required revenue for the gas sector, according to an official statement from the Ministry of Finance.

The ECC rejected a proposal to increase tariffs for domestic consumers, citing concerns about the additional financial burden on households. 

The committee also instructed the Petroleum Division to implement a grid transition levy on captive power plants to enhance energy sector performance.

The meeting reviewed a summary submitted by the Petroleum Division, proposing revisions to gas tariffs for industry and certain domestic slabs. 

Attendees included Petroleum Minister Musadik Masood Malik, Power Minister Sardar Awais Ahmed Khan Leghari, and senior officials.

The decision comes after weeks of opposition from industrialists and exporters, who argued that higher utility costs could hurt small and medium enterprises (SMEs). 

Meanwhile, the Oil & Gas Regulatory Authority (OGRA) recently recommended a 26% gas price hike to generate Rs. 847.33 billion during the current fiscal year.

Under the revised tariff structure, the average gas price is set at Rs. 1,762.51 per MMBTU for Sui Southern Gas Company (SSGC) and Rs. 1,778.35 per MMBTU for Sui Northern Gas Pipelines Limited (SNGPL).