Finance Ministry urges system to prevent misuse of gas for power generation

ISLAMABAD: The Finance Ministry has asked the Petroleum Division to create a system to make sure that the gas given to industries is only used for its intended purposes and not for producing electricity.

This condition will be part of the final decision about a request from the Petroleum Division.

The request is to treat industries the same way as regular people and businesses when it comes to gas, and to treat Captive Power Plants (CPPs) the same as the CNG sector.

According to Business Recorder, this request will soon be reviewed by the Economic Coordination Committee (ECC) of the Cabinet.

Back in 2005, the ECC made a policy to manage the use of natural gas in the country, especially when there is a high demand or a shortage. Over time, they’ve changed the rules for who gets priority when gas is short.

In 2013, the ECC allowed gas companies to control gas distribution based on these rules. Then in 2018, the ECC decided that industries would be divided into export and non-export sectors. Export industries got a special price for gas at $6.5 per mmbtu, which was later increased to $9 per mmbtu by 2023.

However, this subsidy ended in July 2023, and industries were offered a mix of local and imported gas, following another ECC decision.

In February 2024, the difference between export and non-export industries was removed, and now industries are classified as either process industries or industries that generate their own power.

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