With effect from July 1, the Economic Coordination Committee (ECC) of the Cabinet approved a rise in consumer-end gas prices of up to 335 percent on Thursday. For two gas utilities, this will result in revenue of approximately Rs666 billion for the current fiscal year.
In addition to the Rs546bn already determined by the Oil and Gas Regulatory Authority, the proposed increase in gas prices would enable the two gas utilities, Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), to generate an additional Rs120bn in surplus revenue (Ogra).
In order to make up for some losses from the prior fiscal year, the petroleum division requested that this be done. After being approved by the federal cabinet, the updated tariffs will be announced and must be in effect as of July 13 to be considered effective.
The 500,000 tonnes of wheat import tenders that were authorised two days ago have been cancelled by the committee. The ongoing decrease in the price of wheat globally is to blame for this. TCP has been instructed to issue new tenders for the importation of 300,000 tonnes of wheat.
The ECC decided to lower the gas tariffs for the export and non-export sectors by Rs 100 per unit, or million British thermal units (mmBtu), to Rs 1,350 and Rs 1,550 per mmBtu, respectively, as opposed to the Rs 1,450 and Rs 1,650 suggested by the petroleum division. These prices would still be 58 percent more expensive than the current rates, which are Rs. 852 and Rs. 1,087 a unit, respectively.
Gas rates for the smallest residential slab, up to 50 cubic metres, would be taxed at Rs171 per mmBtu under the new decision, a 43 percent increase over the previous rate of Rs121 per unit.
These consumers’ monthly expenses would increase by 36%. The price for the subsequent 100 cubic metre slab would stay at Rs 300 per unit. The prices for the third (200 cubic metres) and fourth (300 cubic metres) slabs will increase by 26% and 151%, respectively, to Rs696 and Rs1,856 per unit.
For customers with a monthly use of 400 cubic metres or less, the final slab has been combined into one. They will pay the same price of Rs3,712 per unit, which is virtually LNG’s price.
Their expenses will climb by 346 percent as a result of the 335 percent increase from the existing rate of Rs 1,107 per unit.