Ministry proposes 23pc hike in gas tariff

Ministry proposes 23pc hike in gas tariff

ISLAMABAD: The Ministry of Petroleum and Natural Resources has sent a summary to the prime minister proposing an increase of 23 percent on an average in the gas tariff for all categories of gas consumers except domestic consumers.

 The gas utilities companies are on the verge of collapse and in case the gas tariff is not increased, the Sui Southern and Sui Northern will default. Thus to ensure the minimum rate of return of 17 percent to the companies, an increase in gas tariff is inevitable.

 According to calculations, Rs50 billion have to be generated for the gas companies — Rs33 bn for the Sui Northern Gas Pipelines Limited and Rs17 bn for the Sui Southern Gas Company Limited.

 “We have proposed to the PM to introduce a uniform gas tariff for categories of consumers that include commercial, industrial, CNG, fertilisers, captive power plants and power houses. However, we have proposed to the prime minister not to increase the gas tariff for domestic consumers,” said sources.

 The current gas tariff for commercial sector stands at Rs636.83 per MMBTU, Industrial Rs488.23 per MMBTU, CNG Rs656.52 per MMBTU, cement Rs742.97 per MMBTU, fertilizers sector Rs123.41 per MMBTU for gas used as feed, Rs488.23 per MMBTU for gas used as fuel for electricity generation, Rs488.23 per MMBTU for Wapda and KESC, captive power plants and IPPs for power generation.

 The sources added: “We want that power tariff should not only be increased for the said categories of consumers but also want to make the gas tariff uniform.”Earlier, it was proposed to increase the gas rates by 5 percent for domestic consumers and 7pc and 10pc for other consumer categories, but the prime minister rejected it saying the domestic consumers should be exempted from any raise in tariff. Now the ministry has prepared a new summary under which it has been proposed that gas tariff should be raised for all other consumers to avert the gas utilities from defaulting.

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