Govt mulls imposing price equalisation levy to sustain gas sector
The government is considering a mechanism to impose a price equalisation levy, or surcharge, on wellhead gas to cross-subsidise protected residential consumers and industrial sectors, with an aim to relieve a Rs10-15 billion burden from the federal budget on account of annual subsidies enjoyed by the sector. The initiative is part of petroleum sector reforms under the Integrated Energy Plan, driven by the Prime Minister’s Office in collaboration with international lending agencies, to transform the country’s inefficient gas companies to self-sustaining and profitable entities, ultimately paving the way for their privatisation. The development comes as the country’s energy challenges are mounting, with the population projected to cross 250 million by 2050 and per capita primary energy consumption being among the lowest in the region — at 0.33 tonnes of oil equivalent (TOE) compared to 0.39 in Sri Lanka and 0.65 in India.