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Up to 200% increase in gas prices for domestic consumers sought

June 25, 2019

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The summary prepared by the Petroleum Division based on the decision of Ogra has been sent to the Economic Coordination Committee. — AFP/File
The summary prepared by the Petroleum Division based on the decision of Ogra has been sent to the Economic Coordination Committee. — AFP/File

The Petroleum Division has sought an increase of up to 200 per cent in the prices of gas for domestic consumers with effect from July 1, 2019.

The summary prepared by the division based on the decision of the Oil and Gas Regulatory Authority (Ogra) has been sent to the Economic Coordination Committee (ECC), which is expected to take it up on Wednesday.

According to the summary documents obtained by DawnNewsTV, the increase in rate for the first slab of domestic sector consuming less than 50 cubic metres per month has been worked out at Rs184 per MMBTU (million British thermal unit), from the existing Rs121. The monthly bill of this category will increase to Rs422 from Rs285.

The rate for the second domestic slab (50-100 cubic metres) has been proposed at Rs369, instead of Rs127 per MMBTU. The monthly bill of this category will increase to Rs1,219 from Rs572.

The petroleum division worked out the rate for consumers using 100-200 cubic metres per month at Rs553 per MMBTU, instead of Rs264. The monthly bill of this category will increase to Rs4,009 from Rs2,305.

The next slab of 201-300 cubic metres per month has been proposed at Rs738 per MMBTU, instead of Rs275. The monthly bill of this category will increase to Rs7,995 from Rs3,589.

The division proposed a rate of Rs1,107 per MMBTU, from the existing Rs780, for consumers using 300-400 cubic metres per month These consumers will pay a monthly bill of Rs14,373 from Rs13,508.

For consumers using more than 400 cubic metres per month, the rate has been proposed at Rs1,476 per MMBTU from Rs1,460. The monthly bill of this category will decrease from Rs31,573 to Rs25,534.

The rate for the bulk domestic sector has been proposed to remain the same at Rs780 per MMBTU

Meanwhile, the Petroleum Division has sought a 31pc increase in the gas rates for most other sectors including fertilizers, power, cement, zero-rated industry, CNG and commercial.

Sources said the hike in gas prices, if approved without any changes, will put an overall additional burden of Rs175 billion on consumers. The ECC will forward its recommendation to the federal cabinet, whose decision will lead to Ogra's notification of the increased gas prices.

The gas prices are changed twice a year – on the first of July and January. Because of political transition, the last gas price increase came into effect in October 2018 instead of July 1. The 35pc average price increase of September was affected with a target to recover additional revenue of Rs116 billion, while high-consumption domestic consumers faced the highest 143pc increase.

Ogra had originally recommended an 186pc increase for the first two slabs of domestic consumers and a 30pc increase for most of other categories in industry, commercial, power sectors, etc. The government, however, diverted the burden from domestic consumers to electricity, industry, commercial and fertiliser sectors that would indirectly spread out to all consumers and categories.