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ISLAMABAD: The federal government has scrapped gas subsidy for five significant export-oriented sectors as Sui Northern Gas Pipelines Limited (SNGPL) will stop supply of subsidized gas to its consumers from May 1, 2023.
In a letter dated April 29, 2023, SNGPL informed its customers that the government’s subsidy on the supply of gas/re-gasified liquefied natural gas (RLNG) to five important export-oriented sectors for the fiscal year 2022–2023 had been completely used up.
“Therefore, SNGPL is constrained to withdraw the concessionary tariff to five export-oriented sectors with effect from May 1, 2023,” said the letter titled “Exhaustion of Allocated Budgeted Subsidy on RLNG Price to Export-Oriented Sectors.” “Gas/ RLNG supply to your industrial units shall remain available at Oil and Gas Regulatory Authority (Ogra)-notified tariff with effect from May 1, 2023.”
Previously, the federal government was providing the export-oriented sectors with a subsidy of Rs 80 billion for the supply of petrol at a reduced price. Sources claim that the discounted rate of $9 per million British thermal units (mmBtu) for the delivery of RLNG to the textile, sports, medical, leather, and jute sectors will expire, and they will now have to pay an additional $4.
The federal government has done away with a series of concessions on the demand of the International Monetary Fund (IMF) and other sectors, said sources. In March 2023, the National Electric Power Regulatory Authority (Nepra) endorsed the government’s decision to withdraw the concessionary tariff for the export-oriented sectors and agricultural tube wells from March 1.
