The Ministry of Petroleum and Natural Resources has decided to increase gas price by 10 to 64 per cent from January 1, and with effect to this decision Sui Southern (SSGCL) and Sui Northern (SNGPL) will collect Rs 60 billion within six months.
Officials at the Petroleum Ministry said that a hike in gas prices was pending for the last five months due to an unfavourable political situation. They said that a summary recommending between 10 to 64 per cent increase in gas prices from Jan 1, 2015 has been prepared to address financial problems of both SSGCL and SNGPL and due to conditions laid down by the International Monetary Fund (IMF).
They also said that rates for the first two slabs of domestic consumers will be maintained at the current level, while for the third slab 10 to 16pc raise will be made.
It has also been decided to increase the gas price for industrial consumers by 53pc, commercial category of gas consumers by 18pc, fertiliser plants by 64pc and for captive power plants by 30pc, they added.
The officials further said that with the start of new year, gas tariff for commercial consumers will be set at Rs750 per Million British Thermal Unit (MMBTU) with an increase of Rs114/mmbtu, while for industrial consumers gas price will be set at Rs750/mmbtu with increase of Rs262/mmbtu, and Rs750/mmbtu with increase of Rs94/mmbtu for consumers of Compressed Natural Gas (CNG).
Similarly, it has also been decided that the gas tariff for consumers of feed stock will be set at Rs200/mmbtu with a raise of Rs76/mmbtu, and gas price for consumers of Captive Power Plants will be set at Rs 750/mmbtu with a raise of Rs177/mmbtu.
Meanwhile, with a raise of Rs12/mmbtu the gas tariff for K-Electric, government-owned power plants and independent power producers (IPPs) will be set at Rs500/mmbtu.
The Oil and Gas Regulatory Authority (OGRA) is expected to issue a notification of between 10 to 64pc hike in gas tariff on the advice of Ministry of Petroleum on Dec 31, 2014.
SSGCL and SNGPL have already requested OGRA to further raise gas price for SNGPL by Rs122/mmbtu, for SSGCL Rs27/mmbtu, which would ultimately cause further burden on the common public apart from the likely 10 to 64pc increase in the gas price.
OGRA is expected to raise gas prices further in February when it holds a public hearing following the appointment of member (Oil) OGRA to complete its quorum.
When contacted, a spokesperson of the Petroleum Ministry said that advice on the gas price hike will be issued to OGRA after final approval of Prime Minister Nawaz Sharif on Dec 29.