ISLAMABAD, Nov 24: The natural gas prices are likely to be increased by more than 10 per cent during second week of December, the first tough decision of the new civilian government following over 60 per cent raise in energy rates during the last three years of military rule.

The petroleum prices have increased by an average 67 per cent including 130 per cent rise in furnace oil, electricity rates enhanced between 20 and 55 per cent for various consumer groups and gas prices went up between 35 and 88 per cent during October 1999 and October 2002.

The gas rates for domestic consumer slab of 3.56-7.1 MMBTU increased from Rs 65.58 in October 1999 to Rs 100.73 in October 2002 while rate for more than 10.86 MMBTU increased from Rs 107.58 to Rs 201.45 per month in October 2002. This calculates between 35 per cent to 88 per cent in three years.

Last year, the federal government decided to dismantle the wellhead gas price agreement of Pakistan Petroleum Limited (PPL) to bring its rate at par with other gas fields which are linked to the international oil price.

This was to result in up to 300 per cent increase in consumer gas price, but it was decided to provide 50 per cent discount to the consumers and total increase be capped at around 130 per cent over a period of five years.

Sources in the petroleum ministry said this decision was further revised to incorporate a price cap agreement finalized with the private producers to provide discount on rise in international oil prices to the government.

These sources said in the final analysis, the gas price increase as a result of dismantling of PPL’s agreement would come out to be a maximum of 50 per cent in four years.

The sources said under the decision of the federal cabinet gas prices of all producers (of around 23 gasfields) would be revised in December and June every year and resultantly consumer prices would be revised in January and July every year.

The prices of petroleum products have increased by an average 67 per cent including 126 per cent rise in furnace oil during military rule October 1999-2002, official statistics suggest.

After furnace oil, light diesel oil prices were increased by 90 per cent, high speed diesel by 79 per cent, kerosene oil by 68 per cent, JP-4 by 41 per cent, HOBC by 33 per cent and premium by 30 per cent.

The top two products i.e., furnace oil (126 pc) and LDO (90 pc) have a direct bearing on two largest and most important sectors of the national economy — power sector and agriculture. This was, however, nominally offset by a reduction of around 1.5 per cent to 8.6 per cent last week.