Government increases gas prices by 10-143 per cent

ISLAMABAD: Gas prices in the country were increased by up to 143 per cent, Petroleum Minister Ghullam Sarwar announced on Monday.

Petroleum Minister Ghulam Sarwar said the majority of gas consumers would be subjected to a maximum 20 per cent increase, while consumers using over 500 cubic meters would see an increase of up to 143 per cent.

"We have only approved an increase of Rs23 in the total gas bill for the common man," he said while addressing a joint press conference with Information Minister Fawad Chaudhry.

"Both Sui Southern Gas Company and Sui Northern Gas Pipelines Limited were in profit before the PML-N government came to power in 2013. Now, they have left with both companies operating with a deficit of Rs152 billion rupees," the petroleum minister said.

The new measures would inject "58 billion rupees to stabilise the two companies", Sarwar added.

The petroleum minister informed reporters that only 23 per cent of the country’s population was using the gas network.

“There were previously three slabs which have been increased to seven. Further, we have divided them among lower middle class, middle class and upper class,” Sarwar said.

"It was difficult for the government to streamline issues as gas was being earlier purchased for higher prices and sold cheap," Sarwar added. 

Increase in gas prices:

• Domestic gas consumers using 50 cubic meters will see an increase of 10 per cent. The new rate per month will be Rs275 from the old rate of Rs252."
  
• Domestic gas consumers using 100 cubic meters will see a rise of 15 per cent and the new rate per month will be Rs551 from old rate of Rs480.
  
• Domestic gas consumers using 200 cubic meters will see a rise of 20 per cent and the new rate per month will be Rs2,216 from the old rate of Rs1,851.
  
• Domestic gas consumers using 300 cubic meters will see a rise of 25 per cent. New rate per month will be Rs3,449 from old rate to Rs2,764.
  
• Domestic gas consumers using 400 cubic meters will see a rise of 30 per cent. New rate per month will be Rs12,980 from old rate of Rs9,990.
  
• Domestic gas consumers using up to 500 cubic meters will see a rise of 143 per cent. New rate per month will be Rs 30,339 from old rate of Rs 12,482.
  
• Domestic gas consumers using over 500 cubic meters will see rise of 143 per cent. New rate per month will be Rs36,402 from old rate of Rs 14,973.
  

40% increase in CNG prices: minister

Speaking during the press conference, Sarwar said that the price of CNG was being increased by 40 percent from Rs700/mmbtu to Rs980/mmbtu. 

Experts said that hike in CNG prices would translate into an approximate Rs15 increase per kilogram for end consumers. 

Sarwar added that the government has also eliminated all taxes currently applicable on Liquefied Petroleum Gas (LPG), replacing them with 10 per cent GST. 

On September 10, the ECC had decided against an immediate increase in gas prices and left the final decision to Prime Minister Imran Khan. Further, it had agreed to provide fertiliser factories with 50 per cent local gas and 50 per cent LNG.

The 12-member ECC includes Law Minister Farogh Naseem, Petroleum Minister Ghulam Abbasi, Planning and Development Minister Khusro Bakhtiar and Railways Minister Sheikh Rashid. The committee also includes prime minister’s advisors Razak Dawood and Dr Ishrat Hussain

In addition, six more ministers — communications, national food security, power, privatisation, statistics and water resources — are part of the ECC.

The country's depleting foreign exchange reserves present a pressing challenge to the new government. With outstanding loans of worth $94 billion, the government has remained indecisive on approaching the International Monetary Fund.