Rs395b Sui gas bomb ticking

The Economic Coordination Committee (ECC) of the Caretaker Federal Cabinet has decided to impose an additional financial burden of Rs 395 billion on gas consumers, reported the 24NewsHD TV channel.  

This decision comes in the wake of pressure from the International Monetary Fund (IMF), urging the interim government to fulfill an earlier agreement to raise gas prices.

In this regard, an urgent meeting of the ECC was held in Islamabad on Monday under the chairmanship of the Caretaker Finance Minister Dr. Shamshad Akhtar to revise the gas tariffs.

During the ECC meeting, approval was granted to raise gas prices by up to 200%, with domestic consumers set to bear an increase of up to 172%, while other gas consumers will face a staggering 200% price hike.

Furthermore, fixed monthly charges for protected customers will surge from Rs 10 to Rs 400.

It is noted that the final approval for these substantial gas price increases lies with the federal cabinet.

Meanwhile, the consequences of the delayed gas price hike have not escaped notice, with Sui gas companies reporting significant losses amounting to a staggering Rs. 46 billion.

In response, the IMF is pushing for a substantial increase in gas rates to recoup these losses incurred during the period from July to September, the sources disclosed.

Under the proposed gas prices for different categories of gas consumers, gas tariff for protected domestic (residential) consumers will remain the same while the gas price for non-protected domestic consumers who use up to 0.25hm3 (cubic hectometer) is proposed to be revised from Rs 200 per Million British Thermal Unit (MMBTU) to Rs 300/mmbtu.

Similarly, the gas price for non-protected domestic consumers who use up to 0.6 hm3 is proposed to be increased from Rs 300/mmbtu to Rs 600/mmbtu, while gas price for non-protected domestic consumers who use up to 1hm3 is proposed to be revised from Rs 400/mmbtu to Rs 1,000/mmbtu and the gas price for non-protected domestic consumers who use up to  1.5hm3 is proposed to be revised from Rs 600/mmbtu to Rs 1,200/mmbtu.

Likewise, gas price for non-protected domestic consumers who use up to 2hm3 is proposed to be revised from Rs 800/mmbtu to Rs 1,600/mmbtu and the gas price for non-protected domestic consumers who use up to 3 hm3 is proposed to be increased from Rs 1,100/mmbtu to Rs 3,000/mmbtu while the gas price for non-protected domestic consumers who use up to 4 hm3 is proposed to be revised from Rs 2,000/mmbtu to Rs 3,500/mmbtu. Furthermore, the gas price for non-protected domestic consumers who use above 4hm3 is proposed to be increased from Rs 3,100/mmbtu to Rs 4,000/mmbtu with effect from 1st October, 2023.

The fixed monthly charges for protected category of domestic (Residential) consumers will go up from Rs 10 to Rs 400 while fixed monthly charges for non-protected domestic consumers who use up to 1.5 hm3 is proposed to be increased from Rs 460 to Rs 1,000 and the fixed monthly charges for non-protected domestic consumers category who use 2 hm3 of gas to above 4hm3 is proposed to be increased from Rs 460 to Rs 2,000  while with effect from 1st October, 2023.

As per proposed revised gas tariff for other categories of gas consumers, the gas price for bulk consumers is proposed to be raised from Rs 1,600/mmbtu to Rs 2,000/mmbtu, while the gas price for special commercial (Roti Tandoor) will remain the same at Rs 697/mmbtu and gas price for commercial consumers is proposed to go up from Rs 1,650/mmbtu to Rs 3,900/mmbtu.

Similarly, gas tariff for Liberty Power is proposed to increase from existing Rs 2,406/mmbtu to Rs 3,890/mmbtu while the gas price for Liberty Power is based on HSFO linked formula and not fixed by the government. Likewise, gas price for fertilizer plant of FFBQL (feed) is proposed to be increase from existing Rs 510/mmbtu to Rs 580/mmbtu while no change in gas price for Engro (feed) is proposed as Engro Fertilizer Ltd (new plant) has a claim of extended period for feed gas concessionary tariff of US$ 0.7/mmbtu due to non-supply of gas by SNGPL and Sindh High Court has granted stay order to maintain the status quo. However, gas price for fertilizer (fuel) is proposed to be increase from existing Rs 1,500/mmbtu to Rs 1,580/mmbtu. Furthermore, gas price for cement category of gas consumers is proposed to be revised from existing Rs 1,500/mmbtu to Rs 4,400/mmbtu.