Gas prices would rise for consumers in the residential, commercial, and industrial sectors, according to the Economic Coordination Committee of the Cabinet (ECC).
Domestic consumer rates have gone up from 43 to 335 percent. There used to be seven slabs, but there are now only five. Gas prices for those consuming up to 1 hm3 in the second slab, which are now Rs300 per MMBTU, were not increased by the government.
In addition, the cost of gas for the export-focused sector went up from $6.5 to $9 per MMBTU. The ECC reduced the price per MMBTU for captive electricity from Rs1,650 to Rs1,550 and for general industry by Rs100, from Rs.1,450 to Rs.1,350 per MMBTU.
According to the official summary given to the ECC, the seven-slab structure would be reduced to five by merging the final two current slabs; the tariff for the combined slab would be Rs173/MMBTU. The slabs up to 0.4 hm3 and up to 0.5 hm3 would also be combined. No minimum charge will apply to domestic services.
Up to 0.5 hm3, the price, which was formerly Rs.121 per MMBTU, will be increased to Rs173/MMBTU, or an increase of 43%; up to 1 hm3, the pricing will stay at Rs.300 per MMBTU.
According to the official summary given to the ECC, the seven-slab structure would be reduced to five by merging the final two current slabs; the tariff for the combined slab would be Rs.173/MMBTU. The slabs up to 0.4 hm3 and up to 0.5 hm3 would also be combined. No minimum charge will apply to domestic services.
Up to 0.5 hm3, the price, which was formerly Rs.121 per MMBTU, will be increased to Rs173/MMBTU, or an increase of 43%; up to 1 hm3, the pricing will stay at Rs.300 per MMBTU. It is suggested to combine the slabs in the category of consumers for tandoor/roti because 95 percent of consumers are located in the last slab of the current building. The price for all tandoors will be set at the Average Prescribed Price (Rs928/MMBTU), and there will only be one slab.
Although LPG is an alternative fuel for business consumers and is 4 times more expensive than indigenous gas in terms of energy units, an increase in price of 81 percent has been proposed; nonetheless, the proposed increase in price is still significantly less than the cost of LPG (58 percent of LPG price only).
Although LPG is an alternative fuel for business consumers and is 4 times more expensive than indigenous gas in terms of energy units, an increase in price of 81 percent has been proposed; nonetheless, the proposed increase in price is still significantly less than the cost of LPG (58 percent of LPG price only). Punjab’s non-export industries must pay the whole cost of RLNG. The priority order would be changed through a different plan to enable Punjab’s export and non-export industries to get indigenous gas. The export and non-export industries in Punjab shall be charged the same tariffs for gas delivery as announced by OGRA as soon as that is feasible.
Captive power units and process consumers in the non-export business may be charged at Rs. 1,550/ininbtu, which is equivalent to $8/mmbtu; in the export industry, they may be charged at Rs. 1,350/mnibtu, which is equivalent to $7/mmbtu.
Due to its overall effect on farmers, the price of fertiliser feed hasn’t increased considerably in the past. The price is expected to be roughly 50% of the Average Prescribed Price, however the cost of using fuel gas has been estimated to be twice as much, or Rs1,857/mmbtu.
Federal Minister for Finance and Revenue Miftah Ismail presided over the meeting, according to a news release released by the Ministry of Finance following the ECC meeting. For the fiscal years 2022–2023, the Petroleum Division provided a summary of the natural gas selling pricing. It was claimed that since FY2015–16, gas prices had not been adjusted in accordance with OGRA’s determined revenue requirements. As a result, as of March 2022, there was a buildup of revenue shortfall and tariff disparity totaling Rs547 billion. Similar to this, the circular debt for the gas industry climbed from Rs 299 billion in June 2018 to Rs 1,232 billion on March 31, 2022.
The Petroleum Division established general guidelines/parameters for the revision of the category-by-category consumer gas sale pricing in order to address revenue losses, control cyclical debt in the gas sector, maintain the supply chain, and invest in exploration and production. The ECC approved the suggested change in consumer gas selling prices and gave instructions to further lower gas costs for captive power and export and non-export industries.
The continuation of the PM’s relief package, 2020, the Sasta Atta programme for KP, and the extension of the Utility Stores network across Pakistan were all summarised by the Ministry of Industries and Production. For the two months from July 1 to August 31, the ECC approved the continuation of the distribution of subsidised Atta under the Prime Minister’s Sasta Atta Initiative on 1,200 additional sale points in KP, with further instructions to submit at the next ECC meeting a comprehensive mechanism on distribution of subsidy packages through the USC.
On a report of the Power Division, the ECC approved the issuing of a GoP sovereign guarantee of Rs. 10 billion for the development of two units of the 90 percent complete 660 MW Super Coal Power Projects in Jamshoro in favour of local banks and financial institutions (STFF).
For the Japan International Cooperation Agency, the Ministry of Economic Affairs provided a brief on tax exemption from GST payment (JICA). The ECC permitted a broad exemption from the payment of GST by JICA in respect of commodities purchased by JICA in order to assist the development operations conducted by JICA. This exemption will also be accessible to JICA when it purchases services in the Islamabad Capital Territory in accordance with the ICT Ordinance of 2001.
Mahnur is MS(development Studies)Student at NUST University, completed BS Hons in Eng Literature. Content Writer, Policy analyst, Climate Change specialist, Teacher, HR Recruiter.
