Month: September 2021

Pakistan is suffering from circular debt, mostly due to high capacity charges, which have been further aggravated due to excess capacity and its underutilisation. One of the solutions that have been discussed and even partly implemented is tariff reforms. A logical argument is that electricity utilisation will increase if tariff is brought down. The risk, however, is that the utilisation may not increase and thus the companies may suffer on two counts – reduced tariff and reduced sales. Hence, there has been reluctance to introduce tariff incentives on a wider…

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With a gas price hike of 7-14 per cent due in the first week of next month as required under a determination of the Oil & Gas Regulatory Authority (Ogra), the government has started thinking a little differently. Finally, it has decided to start giving price signals to consumers based on energy availability and its cost of supply. To begin with, it would be introducing a sort of punitive tariff, described in official jargon as inverse tariff, for more than 40pc of higher-end residential gas consumers in winters — November…

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Pakistan is not very rich in natural resources and endowments but very poor in managing whatever it has and even poorer in recognising the potential of such resources and (mis) use by others. Fresh water and data are two prime examples in this case. Let us start with the fresh water. A country that was once blessed with abundant fresh water supply, essentially through river systems, is losing it quickly through three “I”s; ie India (for manipulating the Indus Waters Treaty), indecision (on dams and reservoirs), and inaction (to mitigate…

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The third slab (200 cubic metres per month) pertains to almost two million consumers with 18pc of gas consumption. They are currently charged at Rs553 per unit and their monthly bill works out at Rs3,733. The petroleum division has sought their rate to go up by about 24pc to Rs683 per unit, showing an increase in monthly bill to Rs4,300. Also, just 3.3pc (or 371,000) consumers fall in the fourth slab with monthly consumption of 300 cubic metres and are currently charged at Rs738 per unit, translating into monthly bill…

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