Amidst speculations of a 186% rise in gas tariff, the Economic Coordination Committee (ECC) has okayed a 143% rise in gas tariff with low-volume consumers (50 cubic meters) getting the least hike of 10%.
The decision was taken at the ECC meeting chaired by the Federal Finance Minister Asad Umar, on Monday.
The rise in gas tariff has been smoothly divided among the different sectors such as CNG, Cement, Commercial Industry, Power and Fertilizer, relieving the residential consumers.
The Oil and Gas Regulatory Authority (OGRA) had earlier proposed an average increase of 46%, however, the petroleum division gave a green signal for a 35% overall increase. The general sales tax would mean Rs 16 billion in revenue for the federal government while the gas companies would get Rs 95 billion.
While announcing the decision, the Petroleum Minister Ghulam Sarwar Khan told the media that the previous government had left the Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipeline Limited (SNGPL) a deficit of Rs 152 billion despite the fact that the two companies were operating in profit in 2013.
Updated Slabs and their Rates
There are now a total of 7 slabs, up from 3, for the consumers to reduce the burden on the residential consumers.
| Slab | Number of Consumers | Tariff Increase % | New Price / Old Price (per mmbtu) | New Bill / Old Bill |
|---|---|---|---|---|
| Up to 50 m3 | 3,561,545 | 10 | Rs 121 / Rs 110 | Rs 272 /Rs 252 |
| Up to 100 m3 | 2,637,863 | 15 | Rs 127 / Rs 110 | Rs 551 / Rs 480 |
| Up to 200 m3 | 1,740,614 | 20 | Rs 264 / Rs 220 | Rs 2,216 / Rs 1,851 |
| Up to 300 m3 | 436,248 | 25 | Rs 275 / Rs 220 | Rs 3,449 / Rs 2,764 |
| Up to 400 m3 | 524,391 | 30 | Rs 780 / Rs 600 | Rs 12,980 / Rs 9,900 |
| Up to 500 m3 | 226,129 | 143 | Rs 1,460 / Rs 600 | Rs 30,339 / Rs 12,482 |
| Above 600 m3 | 237,078 | 143 | Rs 1,460 / Rs 600 | Rs 36,402 / Rs 14,973 |
There’s barely any impact on the bills of the common household users, however, those who used residential connections for commercial purposes will now be subjected to a huge increase in bills.
The Petroleum Minister told that the GST on Liquefied Petroleum Gas (LPG) has been reduced from 17% to 10% owing to the fact that 60% of the population uses LPG instead of the natural gas which is used by only 23% of the population. The price of an 11kg cylinder would now be Rs 1,400 down from Rs 1,600.
The proposed rates will be presented before the Federal Cabinet and upon approval, OGRA will release an official notification. The next month’s bills will be as per the revised prices.
