The new government had decided to introduce a 46% increase in gas tariff, however, due to the political pressure, the Economic Coordination Committee (ECC) will meet on Monday to mull over a new slab for poor consumers which will keep the impact of the gas price hike to a minimum for the poor.
A new ‘lifeline consumer’ category for gas users is being planned. It will include those who use 50 cubic meters monthly for their gas consumption. This category of consumers, it is hoped, will get a limited price hike.
Two teams from the petroleum division and their gas utilities as well as Oil and Gas Regulatory Authority (OGRA) will brief the ECC about the consequences of 4 slabs instead of 3.
It is under the government’s power to distribute the overall 46% increase among different slabs. Currently, consumers using 600 cubic meters and above are charged at Rs 600 per million British thermal unit (MMBtu), 300 cubic meters at Rs 220 and 100 cubic meters at Rs 110.
As per OGRA’s summary, a 186% increase has been proposed for the lowest slab customers; Rs 110 to Rs 315 (100 cubic meters) and Rs 220 to Rs 629 (300 cubic meters) and Rs 600 to Rs 780 (600 cubic meters). Sui Southern Gas Company (SSGC) has proposed an increase of 14% to 168% however, the government’s policy of uniform gas tariff will be followed throughout the country.
The summary moved by the petroleum division has proposed a 30% increase in gas sale rates for the commercial sector, power plants, cement industry etc. however, the domestic consumers will be facing an increase of up to 186%. Even with these rates, the government will be able to recover 50% cost for the first slab.
The ECC Meeting
The meeting chaired by the Finance Minister Asad Umar has given a green signal for the increase in gas price, however, with strict instructions on not burdening the poor people. According to reports, the price hike will target the elite class.
It is yet to be confirmed whether a new slab for low-income consumers has been finalized or not.