The Pakistan government on Monday approved a substantial increase in natural gas prices, with rates surging by up to 194%, set to take effect on November 1.
The decision was made during a meeting of The Economic Coordination Committee of the Cabinet led by Caretaker Finance Minister Shamshad Akhtar. The ECC approved a significant, uniform gas price hike across all sectors upon the proposal of the Petroleum Division.
The consumers will also experience an unprecedented surge in fixed monthly charges, affecting both protected and non-protected consumers.
The adjustment of gas prices was originally scheduled for July 1, 2022, as per the summary. However, the PMLN-led coalition government postponed the decision, passing on the politically sensitive task to the interim government.
Consequently, gas companies in Pakistan – Sui Southern Gas. Co. Ltd. (SSGC) and Sui Northern Gas – Pipelines Ltd. (SNGPL) – reported a deficit of Rs46 billion for the period from July to September. The summary further highlighted that the country’s natural gas reserves are depleting at a rate of 5-7% annually.
Adjustment in fixed monthly charges
- Fixed monthly charges for domestic protected consumers increased from Rs10 to Rs400, resulting in a 150% annual bill increase.
For non-protected domestic consumers, gas charges have been divided into two slabs:
- First category (up to 1.5 hcm) sees an increase from Rs460 to Rs1,000.
- Second category (above 1.5 hcm) experiences an increase from Rs460 to Rs2,000.
Tariff adjustments for residential consumers
For non-protected residential consumers, a massive increase in gas rates was approved.
- For consumption of up to 0.25 hcm, gas rates increase by 50% to Rs300 per mmBtu.
- For consumption of up to 0.6 hcm, gas rates double to Rs600 per mmBtu.
- For consumption of up to 1 hcm, gas tariff surges by 150% to Rs1,000.
- A substantial 173% increase has been approved for consumers using up to 3 hcm, with prices rising to Rs3,000 per mmBtu from the current Rs1,100.
The tariff for bulk consumption was increased by a quarter from Rs1,600 per mmBtu to Rs2,000. However, the special commercial category (tandoor roti) will remain unchanged at Rs697 per mmBtu.
Tariff updates for bulk consumption
- Tariff for bulk consumption was increased by 25%, from Rs1,600 per mmBtu to Rs2,000.
- For the special commercial category (tandoor roti) the tariff remains unchanged at Rs697 per mmBtu.
Tariff updates for commercial consumers
- A 136% increase was approved for commercial consumers, raising the rate to Rs3,900 per mmBtu.
- Cement factories and CNG stations are expected to see an increase of more than 193% and 144%, respectively, bringing the tariff to Rs 4,400.
- Export industries see an 86% tariff increase to Rs2,050 per mmBtu.
- Non-export industries witness a 117% tariff increase to Rs2,600.