ISLAMABAD, Jan 1: The government on Tuesday increased natural gas rates for commercial and industrial sectors by an average seven per cent with immediate effect. However, domestic consumers have been exempted from the hike.

The rates for CNG stations, transport and cement sectors, fuel for fertiliser (not feedstock) and power generation have been increased for both SNGPL and SSGCL, according to a notification issued by the Oil and Gas Regulatory Authority (Ogra).

Ogra had proposed a 6.56 per cent increase in tariff for all categories, including domestic consumers, and sought a reduction by about 70 paisa per unit for CNG stations and cement factories under the jurisdiction of the Sui Northern Gas Pipeline’s proposal for a hike in gas rates for the domestic consumers, but allowed a 5.6 per cent increase in the rates of commercial consumers, including ice factories, and 10 per cent for CNG stations and cement factories at a uniform rate across the country.

The increase was allowed because prices of crude oil and high fuel sulphur oil (HSFO) had registered a constant increase during the June-Nov 2007 period which would result in a rise in well-head prices of gas producers for the period between Jan 1 and June 30, 2008.

Pakistan gas rates are linked with international oil prices.

The increase in average cost of gas, the government claimed, would cause a shortfall in SNGPL’s revenue requirement to the tune of Rs4 billion and Rs2.2 billion in SSGCL’s in annual accounts for 2007-08 and hence an increase in rates.

The consumer-end gas tariffs are revised after six months under the existing laws on Jan 1 and July 1 every year.

The commercial gas rates have been increased by Rs15 per MMBTU to Rs283.05 from Rs268.23, showing an increase of 5.6 per cent. The gas rates for general industry, captive power, power generation companies of Wapda and fuel for fertiliser have increased by Rs14 per unit to Rs251.55 per MMBTU from Rs238.38, showing an increase of 5.9 per cent.

Likewise, the rates for CNG stations have gone up by Rs27 (instead of Rs13 proposed by Ogra) per MMBTU to Rs291.36 from the existing Rs264.87, up by over 10 per cent.

Cement industry’s rates have also been raised by Rs31 per MMBTU to Rs335.67 per unit (instead of Rs320.97 proposed by Ogra) from Rs305.15.

Ogra had on Nov 20 sent two separate determinations in case of SSGCL and SNGPL to the federal government for the increase in gas rates as an interim measure to meet their revenue requirements.

The authority held public hearings for the matter after allowing interim increase to the gas companies and is yet to come up with its final determination.