Cabinet Defers Summary of Increase In Gas Prices By Up To 335%

The federal cabinet on Friday reportedly deferred the summary of the increase in gas prices up to 335 percent. Prime Minister Shehbaz Sharif chaired the meeting of the federal cabinet.

The Economic Coordination Committee (ECC) of the cabinet last week approved up to 335 percent increase in consumer-end gas prices with effect from July 1 to generate about Rs. 666 billion in revenue for two gas utilities during the current fiscal year.

The increase would allow Rs. 120 billion surplus revenue to the two gas utilities — Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) — over and above Rs. 546 billion determined by the Oil and Gas Regulatory Authority (OGRA) during the current fiscal year on the request of the petroleum division to make up for the partial recovery of previous year’s losses.

The ECC allowed reduced gas rates for export and non-export sectors by Rs. 100 per unit to Rs. 1,350 and Rs. 1,550 per mmBtu, respectively, instead of Rs. 1,450 and Rs. 1,650 recommended by the petroleum division. These rates would still be 58 percent higher than existing rates.

As per the ECC decision, gas rates for the lowest residential slab of up to 50 cubic metres would be charged at Rs. 171 per mmBtu, showing an increase of 43 percent over the existing rate. The monthly bills of these consumers would go up by 36 percent. The next slab of 100 cubic metres would remain unchanged at Rs. 300 per unit.

The third slab (200 cubic metres) and fourth slab (300 cubic metres) would jump 26 percent and 151 percent to Rs. 696 and Rs. 1,856 per unit.

The last existing slabs have been merged into one for all consumers with monthly consumption of 400 cubic metres and would be charged at the same rate of Rs. 3,712 per unit. Those consuming up to 400 cubic metres were currently charged at Rs. 1,107 per unit and would now face an increase of 335 percent and their bills would jump by 346 percent.

The rate for above 400 cubic meters was currently charged at Rs. 1,460 per unit, which would now face a 154 percent increase to Rs. 3,712 per unit.

Published by
ProPK Staff