IMF pressure spurs prompt actions in gas sector.

ISLAMABAD -- Amid the International Monetary Fund's (IMF) persistence for retrospective gas price adjustments to curb runaway circular debt, the caretaker government has to take a series of immediate steps.

These steps include increasing cash payments to urban recipients of the Benazir Income Support Programme (BISP), allocating funds for winter gas in Balochistan, and making cash and non-cash book adjustments to settle inter-corporate payables and receivables among energy entities.

In addition, the government will need to initiate long-term structural changes, like the separation of transmission network from the two existing Sui gas companies, moving towards weighted average cost of local gas and imported LNG and enhanced production of oil and gas molecules.

Informed sources told Dawn that Oil and Gas Regulatory Authority (Ogra) and the ministries of finance and energy along with representatives from Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) remained engaged on pricing mechanism and restructuring of payables and receivables of the energy sector entities and would continue consultations on Tuesday as well.

Rs10bn subsidy planned to protect the poor in Balochistan; more cash proposed for urban BISP recipients

At the centre of the challenge is how to insulate poor households in urban centres from the gas price shock. Urban households are accustomed to cheaper gas prices compared to their rural counterparts, who pay a heavy price for LPG and other expensive alternative fuels.

In Balochistan, where gas supply is crucial for the survival of tens of thousands during freezing winters, this becomes even more critical. This must be done at the cost of unaccounted-for gas (UFG) losses of SSGCL, which fluctuate between 14pc and 18pc.

About Rs10bn in subsidy is being envisaged to protect the poor in Balochistan, while an increase in cash payments under BISP is being worked out to allow poor domestic consumers in the cities to absorb the additional burden of the gas price increase determined by Ogra at 45-50pc for the current fiscal year.

'We have to take care of the low-income consumers through safety nets, for instance in Balochistan, where low-income consumers are comparatively vulnerable because of the severe drop in temperature and annual cold wave during the winter season,' said a senior government official, adding that a special tariff for Balochistan's low-income consumers was being worked out at a...

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