Pakistan to announce hike in gas price

NEW DELHI — Pakistan will announce an increase in the wellhead price of its gas this month when it unveils a new Petroleum Policy, a top government official said.

The increase in the price cap of the gas the government buys from producers for distribution to Pakistan's industrial and domestic consumers will reflect higher oil prices, and will prompt higher prices for end users, the official said.

"We will realign wellhead prices with international oil prices. As a result of realignment the prices are going to go up. The prices will have to be reflected (for end users)," said Mukhtar Ahmed, energy adviser to Pakistan Prime Minister.

At present Pakistan caps gas sale prices for over 90 fields at $36 a barrel crude equivalent. Gas producers have long lobbied for the government to link gas to international oil prices, and view the present policy as a major hurdle in attracting foreign investment.

Ahmed said that domestic gas prices were reviewed every six months. "At an appropriate time when it is politically also convenient for the government, they would be realigned," he said.

Pakistan's energy secretary Ahmad Waqar said his ministry is in the process of getting cabinet approval and the policy is at "very final stages". "We are just completing the document...we are offering better incentives to the investors in terms of pricing," he said.

Current wellhead prices in Pakistan are around $3 per million British thermal units (mBtu), said Ahmed, who is in New Delhi to discuss the Iran-Pakistan-India gas pipeline.

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