Gas price increases of up to 124% have been agreed by the Economic Coordination Committee (ECC) of the Cabinet in order to comply with one of the previous requirements of the International Monetary Fund (IMF).
Ishaq Dar, the minister of finance, presided over the ECC meeting. The ECC has been advised by the Ministry of Energy’s Petroleum division to increase gas prices for residential and other consumer groups, which would bring in Rs. 310 billion more in revenue than the RERR allotted for the six-month period from January to June 2023, which is Rs. 305 billion.
Gas Prices for Domestic and Commercial Consumers
Gas prices for non-protective domestic consumers would range from Rs. 400 from Rs. 300 up to 1hm3, Rs. 600 from Rs. 500 up to 1.5hm3, Rs. 800 from Rs. 553 up to 2hm3, Rs. 1100 from Rs. 738 up to 3hm3, Rs. 2000 from Rs. 1107 up to 4hm3 and Rs. 3100 from Rs. 1460 above 4hm3.
The proposed sales prices for commercial consumers would be Rs. 121 up to 0.5hm3, Rs. 350 from Rs. 300 up to 1hm3, Rs. 730 from Rs. 553 up to 2hm3, Rs. 1250 from Rs. 738 up to 3hm3, Rs. 2250 from Rs. 1107 up to 4hm3 and Rs. 3270 from Rs. 1460 above 4 hm3.
There are five slabs for home users, where costs have climbed by up to 124%, according to sources, making residential consumers more burdened than commercial or industrial consumers.
Additionally, the price of gas for the fertilizer industry rose from 22% to 103%, which caused an increase in the price of power in the upcoming months.
While the price of gas has grown from 10% to 34% for export-related or non-export-related businesses.
The ECC was notified by Petroleum Division that on June 30, 2022, OGRA released its assessment of SNGPL’s and SSGC’s estimated revenue requirements (ERR) for FY 2022–23.
The aforementioned determination states that for the fiscal year 2022–23, SNGPL and SSGCL, respectively, need revenues of Rs. 261 billion and Rs. 285 billion.
The ERR of both gas providers was not permitted to include revenue deficits from prior years by OGRA. According to Section 8(3) of the OGRA Ordinance 2002, the government was required to notify OGRA within 40 days after OGRA’s determination that consumer gas prices would be revised with effect from July 1, 2022 in accordance with government policy.
Consumer gas prices could not, however, be revised as of this writing. The Sui firms have already carried the income loss for the previous six months, from July to December 2022, as a result of price inactivity.
To read our blog on “OGRA will surprise citizens with a shocking gas price increase,” click here.
