Federal Government Yet to Decide on Gas Tariff Increase for Captive Power Plants
The federal government has not yet made a decision on the proposed increase in gas tariffs for Captive Power Plants (CPPs), according to sources from the Finance Ministry.
While the Petroleum Division has suggested disconnecting gas supplies to CPPs instead of raising tariffs, this proposal has been rejected by the International Monetary Fund (IMF). CPPs have strongly opposed any tariff hikes and prefer that the current rates remain unchanged. Despite this, the government is preparing for a gas tariff rebasing this month in order to meet IMF conditions and ensure the ongoing success of the economic program.
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If gas tariffs are increased, CPPs could face a price hike of up to Rs. 1,100 per MMBTU, with the new rates expected to come into effect by February 2025. The CPPs have also indicated that they may challenge any disconnection of gas supplies in court, though they have stated their willingness to pay according to any notified tariff changes.
Additionally, sources mentioned that the Prime Minister has yet to make a final decision on the tariff hike summary.
