Thursday, August 18, 2022

The ECC has approved a 335% increase in gas prices for consumers

The Cabinet’s Economic Co-ordination Committee (ECC) has approved a 335 per cent hike in gas prices for consumers, a decision that will bring about Rs 666 billion in revenue to the two gas companies from July 1 this fiscal year.

With this addition, two gas utilities Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) have been provided by the Oil and Gas Regulatory Authority (OGRA) during the current financial year. For the partial recovery of last year’s losses, there will be an additional revenue of Rs 120 billion from Rs 546 billion fixed at the request of the Petroleum Division.

The notification of revised rates will be issued immediately after Eid-ul-Adha after the approval of the Federal Cabinet.

The Economic Co-ordination Committee (ECC) also canceled tenders for the import of 500,000 tonnes of wheat, which it had allowed two days ago. Tenders, previously approved at 43 43,940 per tonne, were canceled due to falling global wheat prices.

The Trading Corporation of Pakistan (TCP) has been asked to issue new tenders for the import of 300,000 tonnes of wheat.

According to the ECC decision, gas rates for the import and non-import sectors will now be reduced from Rs 100 per unit or one million British thermal units (MMBTU) to Rs 1,350 and Rs 1,550 per m, respectively. MBTU will be done, while the Petroleum Division had proposed to do Rs 450 and Rs 1,650.

These rates will still be 58% higher than the current rates of Rs. 852 and Rs. 1087 per unit respectively.

Under the decision, gas rates for the lowest residential slabs of up to 50 cubic meters will be charged at Rs 171 per mmbtu, which is 43 per cent higher than the current rate of Rs 121 per unit. The monthly bills will increase by 36% while the next slab of 100 cubic meters will remain at Rs. 300 per unit.

The third slab (200 cubic meters) and the fourth slab (300 cubic meters) will increase by 26% and 151% to Rs. 696 and Rs. 1,856 per unit.

The last existing slab has been integrated into one for all consumers with a monthly consumption of 400 cubic meters and will be charged at the rate of Rs. 3,712 per unit which is approximately equal to the cost of LNG.

Users of up to 400 cubic meters are currently charged Rs 1,107 per unit, which will now face a 335 per cent increase and a 346 per cent increase in their bills.

For units above 400 cubic meters, the unit rate was currently charged at Rs 1,460 per unit, which will now face an increase of 154 per cent to Rs 3,712 per unit.

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