Caretaker govt approves massive increase in gas tariff


ISLAMABAD – The caretaker government on Monday approved a massive increase in price of natural gas for different categories of consumers.

The gas price has been increased on the advice of the Oil and Gas Regulatory Authority (Ogra) and the new tariff will be effective from November 1.

The Ministry of Petroleum Division has shared details about the price adjustments. It was clarified that gas prices remain unchanged for protected consumers using 25 to 90 cubic meters per month. However, fixed charges for these protected consumers have been raised.

For users consuming 25 cubic meters per month, the gas price has increased from Rs 200 to Rs 300 per mmbtu. Those consuming 60 cubic meters per month will see a price increase from Rs 300 to Rs 600 per mmbtu. Meanwhile, monthly consumption of 100 cubic meters will now cost Rs 1000 per mmbtu, up from Rs 400.

Further adjustments include an increase from Rs 600 to Rs 1200 per mmbtu for those consuming 150 cubic meters per month, and from Rs 800 to Rs 1600 per mmbtu for those using 200 cubic meters. Users consuming 300 cubic meters will now pay Rs 3000 per mmbtu, up from Rs 1100. Monthly consumption exceeding 400 cubic meters will result in a gas price increase from Rs 2000 to Rs 3500 per mmbtu. Those consuming over 400 cubic meters will see an increase from Rs 3100 to Rs 4000 per mmbtu.

The ECC had initially okayed the increase in gas prices on October 23, citing the country’s depleting gas reserves. These reserves are dwindling at a rate of 5 to 10 percent annually, and the government’s financial burden has surged due to the importation of gas. This financial strain has contributed to the accumulation of a recurring debt of Rs 2.1 trillion, stemming from the previous lack of gas price adjustments.

The Federal Cabinet in its meeting held on 30th October 2023 referred back the summary for reconsideration of the ECC.

The Ministry of Energy has noted that even highly profitable businesses are utilizing natural gas at lower rates, making the decision to raise gas prices a challenging one for the caretaker government. It’s worth mentioning that the last gas price increase occurred approximately two and a half years ago, resulting in a revenue of 461 billion rupees for the national exchequer.

Initially, the Federal Cabinet had postponed the decision on gas prices during an ECC meeting, directing the ECC to review the matter. However, the Ministry of Petroleum subsequently clarified that, as per the ECC’s declaration, gas prices would indeed be raised. This decision is expected to have significant implications for both businesses and consumers alike.

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