Domestic consumers bear Rs17b subsidy cost

ISLAMABAD: As provinces refuse to bear the cost of subsidised liquefied natural gas (LNG) supply to two fertiliser plants, the caretaker government has put a burden of Rs17 billion on domestic consumers. The provinces want full recovery of LNG cost from the farmers. The Petroleum Division was of the view that the continuation of re-gasified LNG supply at Rs1,239 per million British thermal units (mmbtu) from January to March 2024 involved estimated financial implication of Rs17 billion in terms of tariff differential with the notified RLNG price, which was $13 per mmbtu. The decision made by the Economic Coordination Committee (ECC) on November 23, 2023 had been conveyed to the Oil and Gas Regulatory Authority (Ogra), which said that as per the existing guidelines, they could only allow the recovery of RLNG volumes diverted to the domestic sector. Therefore, the guidelines for recovery of RLNG differential on account of supply at Rs1,239 per mmbtu may be reviewed.