The Economic Coordination Committee (ECC) of the Cabinet approved up to 335 percent increase in consumer-end gas prices on Thursday with effect from July 1 to generate about Rs666 billion in revenue for two gas utilities during the current fiscal year.
The increase would allow Rs120bn surplus revenue to the two gas utilities — Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) — over and above Rs546bn 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 revised rates would be notified after the ratification by the federal cabinet soon after Eidul Azha, as these have to be legally in place by July 13 under the law.
The committee also scrapped tenders for 500,000 tonnes of wheat import it had allowed two days ago. The tenders, earlier approved at $439.40 per tonne, were cancelled because of continuously declining global wheat prices. The Trading Corporation of Pakistan (TCP) was asked to float fresh tenders for 300,000 tonnes of wheat import.
According to the ECC’s decision, gas rates for export and non-export sectors would now be reduced by Rs100 per unit — or million British thermal units (mmBtu) — to Rs1,350 and Rs1,550 per mmBtu, respectively, instead of Rs1,450 and Rs1,650 recommended by the petroleum division. These rates would still be 58pc higher than existing rates of Rs852 and Rs1,087 per unit, respectively.
The rates for domestic consumers have gone up by 43pc to 335pc.
Under the decision, gas rates for the lowest residential slab of up to 50 cubic metres would be charged at Rs171 per mmBtu, showing an increase of 43pc over the existing rate of Rs121 per unit. The monthly bills of these consumers would go up by 36pc. The next slab of 100 cubic metres would remain unchanged at Rs300 per unit.
The third slab (200 cubic metres) and fourth slab (300 cubic metres) would jump 26pc and 151pc to Rs696 and Rs1,856 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 Rs3,712 per unit — almost the cost of LNG. Those consuming up to 400 cubic metres were currently charged at Rs1,107 per unit who would now face an increase of 335pc and their bills would jump by 346pc.
The rate for above 400 cubic meters was currently charged at Rs1,460 per unit, which would now face a 154pc increase to Rs3,712 per unit.