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Dar shocks gas consumers with big hikes

The cost of manufacturing will rise due to the increase in gas prices for industries, a significant source of energy generation.

hike in gas prices will push up the cost of production.
hike in gas prices

ISLAMABAD: The Economic Coordination Committee (ECC) of the cabinet hiked natural gas rates from Jan 1 for six months. The price rise ranged from 16 percent to 112.32 percent. In order to secure early disbursement of the $1.2 billion tranche, the government is attempting to raise an additional Rs310 billion from the majority of domestic and all other categories of consumers.

The ECC conference, which was presided over by Finance Minister Ishaq Dar, also introduced the idea of protected users, whose average monthly usage will be less than 0.9 hm3 for a period of four months, from November to February (90 units). Additionally, four protected consumer slabs and six non-protected consumer slabs were introduced.

Hike in gas prices

In addition to the increase in gas prices, a fixed rate of Rs50 per month would be collected from protected consumers & Rs500 from non-protected consumers. According to the government, the fixed-rate collection is justified to lessen the effects of higher bills. Those effects are caused by increased gas usage throughout the winter.

Along with other regular ministers, former prime minister Shahid Haqqan Abbasi attended the ECC meeting. Along with Naveed Qamar, the minister of commerce, and Khurram Dastgir, the minister of power, Dr. Aisha Ghous Pasha, the minister of state for finance and revenue, was also present in the meeting.

Read more: ECC meets today to consider a hike in gas tariff to meet IMF requirement

The cost of manufacturing will rise due to the increase in gas prices for industries, a significant source of energy generation. This rise will subsequently be passed on to final consumers by the industrial sector. As a result, inflation will rise more in the upcoming months.

The government raised gas prices for K-Electric and Sindh Noordiabad. Engro Powergen Qadirpur also faced a gas prices hike by 22.5 percent to Rs1,050 from Rs1,187 per mmBtu. Moreover, gas prices for Liberty Power raised by 103.72 percent to Rs2,406 from Rs1,181. Engro Fertiliser Ltd by 19.65 percent to Rs140 from Rs117 per mmBtu. Gas prices for the cement industry increased by 17.46% to Rs. 1,500 from Rs. 1,023.

Oil and Gas Regulatory Authority (Ogra) granted permission to Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGCL) to increase their tariffs by 74.42 percent and 75.35 percent, respectively, as of January 10. However, the ECC has to approve it first.

Benazir Income Support Programme (BISP)

BISP needed to achieve its budgetary criteria for an increase in unconditional and conditional benefits. Therefore, the ECC awarded Rs40 billion as a technical supplementary grant to BISP.

There would be Rs12 billion for Benazir Kafaalat; unconditional cash transfers to 9 million families. Moreover, there will be an additional Rs22 billion for financial assistance to flood victims as emergency relief.

In addition, Benazir Taleemi Wazaif will receive Rs3.720 billion. The nutritional program will receive Rs1.880 billion, and the direct cost of the cash transfer would receive Rs400 million.

Sara Tayyab
Written By


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