Govt increases gas prices by up to 143pc for SNGPL, SSGCL consumers

ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) has notified up to 143 per cent increases in gas prices for the consumers of Sui Northern Gas Pipelines (SNGPL) and Sui Southern Gas Company Limited (SSGCL) with immediate effect from September 27, 2018.

According to OGRA’s notification, for up to the 50 mmfcd slab, the government increased the gas prices by 10 per cent to Rs121 per mmbtu. According to government estimates, this will increase the monthly bill for consumers in such a category from Rs252 to Rs275.

For the second category of up to 100mmcfd consumers, there is a 15 per cent increase that will push their monthly bill to Rs71. About 2.63 million households fall in this category.

For the third category up to 200 mmcfd consumers, the government has increased the gas prices by 20 per cent. This category of consumers’ monthly bill will shoot up from Rs1,851 to a minimum of Rs2,216.

The newly created fourth slab of up to 300mmcfd consumers will face an increase in their prices by 25 per cent. Their monthly bill will go up from Rs2,764 to Rs3,449.

For the fifth category of up to 400mmcfd consumers, the government has increased the gas prices by 30 per cent. Their monthly bill will increase from the minimum Rs9,990 to Rs12,980.

For the sixth slab comprising consumers using 500mmcfd gas, the government has increased the gas prices by 143 per cent. Their monthly bill jump from Rs12,482 to at least Rs30,339 per month.

For the last category of consumers using more than 500 mmcfd, the government has increased the prices by 143 per cent. The monthly bill of this class will increase from Rs14,973 to a minimum Rs36,402.

The minimum charges are also increased from Rs148.50 to Rs163.35 per month.

The government has also increased the gas prices for commercial consumers by 40 per cent including for special commercial connection like roti/tandoors. Minimum charges have increased from Rs 148.50 to Rs 163.35 per month.

It has increased the gas prices for old fertiliser plants by 50 per cent and for new units up to 40 per cent.

For general industries and captive power plants, the government has increased the gas prices by 40 per cent – an increase from Rs600 per mmbtu to Rs780. However, registered manufacturers or exporters of textile, carpets, leather, sports and surgical goods will be exempted from the increase.

The government increased the gas prices for the power sector by 57 per cent.

The gas sale price for the cement sector also increased from Rs750 to Rs975 per mmbtu. The CNG sector gas prices were also increased by Rs980 per mmbtu.

The Oil and Gas Regulatory Authority (OGRA) had earlier proposed to increase the gas prices by up to 186 per cent to meet the revenue shortfall being faced by the Sui Northern Gas Company Limited (SNGPL) and the Sui Southern Gas Company Limited (SSGCL). However, ECC approved upto 143pc hike in gas prices.

Earlier, the decision to increase gas rates for all consumer categories was taken at a meeting of the Economic Coordination Committee (ECC) of the cabinet. The ECC increased the prices for all gas consumer categories — commercial, industry, power, fertiliser, cement and CNG sectors. Similarly, the ECC increased gas slabs for the domestic sector from three to seven with an aim to pass on the minimum burden on the poor domestic consumers of the country. Likewise, it was expected that the decision of hike in gas prices will generate an additional Rs 94 billion from the end users of gas.

According to sources in the CNG sector, CNG price is likely to go up by Rs15 to Rs17 per kilogram after the notification while this decision has ostensibly come in the backdrop of a shortage of funds for the government to run its daily affairs.

It is relevant to mention here that the decision of hike in gas prices will hurt as many as 9.4 million domestic users – 3.6 million of them falling in the lowest income slab and another 2.63 million in the second lowest income group.

Similarly, due to the increase in gas prices for the power sector, electricity will become expensive by 12 per cent. Likewise, as a result of the OGRA notification, the combined revenue shortfall of the two gas utilities will reduce from Rs152 billion to Rs58 billion. And, it is expected that the gas consumers will pay an additional Rs94 billion in the ongoing fiscal year to gas utilities.