The Ministry of Petroleum in Pakistan has initiated steps to reduce the heavy taxes and high port charges currently imposed on imported liquefied natural gas (LNG) as part of an effort to make electricity more affordable. At present, imported LNG, which costs $11 per million British thermal units (mmbtu) on the international market, is priced at $15 per mmbtu in Pakistan after accounting for approximately $4 in taxes and port fees.
In collaboration with the Ministry of Shipping and Ports, the Petroleum Ministry is exploring ways to lower port charges, which are considered among the highest in the region. Officials believe that reducing these fees could significantly lower the overall cost of LNG for consumers, potentially reducing the price from Rs3,600 per unit to around Rs2,800.
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The growing price disparity between imported and locally produced gas is driving these reform efforts. Currently, local gas is priced at Rs1,200 per unit, while the new pricing formula projects an average cost of Rs1,800 for gas. By reducing taxes and port charges, officials hope to make gas more affordable, which could, in turn, lower electricity costs—a major concern for provinces dealing with tariff discrepancies.
Although the initiative is still in its early stages, officials expect that the proposed reforms could bring substantial relief to both industrial and domestic sectors, fostering a more competitive and affordable energy market for the average consumer.
