Gas tariff hiked by up to 112pc on IMF demand

ISLAMABAD: In order to fulfill another International Monetary Fund’s (IMF) prior condition, the government on Monday approved hiking of gas tariff for domestic, bulk, commercial, export-oriented industries and CNG sector in the range of 17 to 112 percent for different categories.

To generate revenues of Rs310 billion for two giant gas utilities including the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), the Economic Coordination Committee (ECC) of the cabinet approved gas tariffs on the average of up to112 percent for the highest slab users of domestic consumers with effect from January 1, 2023. The number of slabs has also been increased to ten.

According to the decision approved by the ECC on Monday, for domestic (residential consumers), the government placed four categories as “protected” for users from up to 0.25 hm3 to 0.9 hm3. There is one category up to 0.5 hm3 where the price of Rs121 per MMBTU jacked up to Rs150 per MMBTU. The price of gas up to 0.6 hm3 has been reduced from Rs300 per MMBTU to Rs200 per MMBTU, and for the users up to 0.9 hm3, the price has been reduced from Rs300 per MMBTU to Rs250 per MMBTU with effect from January 1, 2023. The price of gas kept unchanged at Rs121 per MMBTU for slab one consumers.

There are six slabs under category of “Unprotected” whereby the users up to 1 hm3, the price has gone up from Rs300 to Rs400 per MMBTU with effect from January 1, 2023; up to 1.5 hm3, the price increased from Rs553 to Rs600 per MMBTU.

For users in slab up to 2 hm3, the gas price went up from Rs553 per MMBTU to Rs800 per MMBTU; up to 3 hm3, the price has gone up from Rs738 to Rs1,100; up to 4 hm3, the gas price went up from Rs1,107 to Rs2,000. For last slab users above 4 hm3, the gas price increased from Rs1,460 per MMBTU to Rs3,100 per MMBTU. For this last category of domestic (residential) users, the price of gas has gone up by 112.3 percent with effect from January 1, 2023.

The protected category will pay a fixed charge of Rs50 (net of meter rent Rs40) and non-protected category is going to pay fixed charge of Rs500 (net of meter rent Rs40).

For bulk consumers, the price has gone up from Rs780 to Rs1,600 per MMBTU; for roti tandoor, the price has been kept un-changed at Rs697 per MMBTU. The commercial customers price increased from Rs1,283 to Rs1,650 per MMBTU.

For power sector, the price of (KE-SNPC, EPQL), the price increased from Rs857 to Rs1,050 per MMBTU. The price for Liberty Power increased from Rs1,181 to Rs2,406 per MMBTU.

For the fertiliser sector, the price of feed (Engro) has gone up from Rs117 to Rs140 per MMBTU. For a feed of FFQBL, the price increased from Rs302 to Rs510 per MMBTU. The price of gas for fuel has gone up from Rs1,023 to Rs1,500 per MMBTU.

For export sector, the price has been increased from Rs819 to Rs1,100 per MMBTU. For captive gas of export-oriented sector from Rs852 to Rs1,100 per MMBTU. For non-exported sectors, the process and captive prices also went up. For CNG sector, the gas price increased from Rs1,371 to Rs1,805 per MMBTU.

According to official statement issued after the ECC meeting , Federal Minister for Finance and Revenue Senator Ishaq Dar presided over the meeting. Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Power Khurram Dastgir Khan, Minister of State for Finance and Revenue Aisha Ghous Pasha, Shahid Khaqan Abbasi; SAPM on Finance Tariq Bajwa, federal secretaries and other senior officers attended the meeting in person while Federal Minister for Industries and Production Syed Murtaza Mahmud, Minister of State for Petroleum. Musadik Malik and the SBP governor attended the meeting virtually through video link.

The Ministry of Energy tabled a summary on natural gas sale pricing FY2022-23 and presented tariff proposals for all consumer categories. The ECC after detailed discussion approved gas price revision proposal for domestic, commercial and power sectors for six months -- January to June.

The Ministry of Economic Affairs presented a summary on G-20 Debt Service Suspension Initiative (DSSI). This debt relief was announced in April 2020 for IDA eligible countries to mitigate the socio-economic impact of Covid-19. Under this initiative debt relief was extended through the suspension of principle and interest payments. So far, 37 debt rescheduling agreements with 15 creditor countries have been signed. Foregoing in view, the ECC allowed the Ministry of Economic Affairs for signing of debt rescheduling agreement with Russia for debt suspension of Covid related amount US$14.53 million.

The Ministry of Poverty Alleviation and Social Safety presented a summary on enhancement of BSIP budget. The meeting was briefed on the on-going BISP programmes including Unconditional Cash Transfer (UCT) Programme “Benazir Kafaalat” covering around nine million families, two Conditional Cash Transfer (CCT) programmes namely “Benazir Taleemi Wazaif” and “Benazir Nashonuma”.

The disbursement of cash assistance to affectees of floods as emergency relief of Rs25,000 was provide per affected family to around 2.7 million families. In Conditional Cash Transfer Programme, there has been accelerated enrolments in “Benazir Taleemi Wazaif”. It was anticipated that additional 1 million children will be enrolled by the end of June, 2023. Also BISP has extended CCT Benazir Nashonuma to all the districts of the country.

The ECC after discussion granted Rs40 billion as Technical Supplementary Grant to BISP to meet its budgetary requirements for increase in the unconditional and conditional grants.