ECC likely to approve massive hike in gas tariff

ISLAMABAD: The caretaker government has started preparations to approve a massive hike in gas tariff and a summary would be presented before the Economic Coordination Committee (ECC) on Monday (tomorrow), ARY News reported on Sunday.

Sources told ARY News that the Petroleum Division will present a summary before the ECC to hike the gas tariff by 200% and 172% for domestic consumers ahead of the winter season.

The hike will be imposed on base tariff and monthly fixed charges for different categories of consumers.

The Petroleum Division suggested to increase the gas price by 200% for different categories of consumers and the hike in monthly fixed charges for protected consumers by 3,900% from Rs10 to Rs400.

Related: Gas tariff likely to be hiked by 200%

The hike plan includes an increase of Rs100 for non-protected consumers for monthly use of 0.25 cubic metre, Rs300 per mmBtu for consumers using 0.60 cubic metre in a month, Rs600 per mmBtu for non-protected consumers of 100-150 cubic metre, Rs800 per mmBtu for 200 cubic metre consumers, Rs1,900 per mmBtu for 300 cubic metre consumption and Rs1,500 per mmBtu for 400 cubic metre consumers.

The hike plan for export units ranging from Rs950 to Rs2,050 per mmBtu was suggested by the Petroleum Division. Moreover, the division also recommended an hike from Rs1,400 to Rs2,600 per mmBtu for the non-export units, Rs2,595 per mmBtu for the CNG sector.

The recommendations for other industries include Rs2,900 per mmBtu for the cement sector, Rs4,400 per mmBtu for the CNG sector and maintaining the prevailing prices for the power generation units and tandoors.

Related: Gas tariff likely to be increased by 100pc on IMF demand

Sources said that the caretaker finance minister summoned the ECC session at 4:00 pm tomorrow and suggested to implement the gas tariff hike plan from October 1.

Fixed charges on non-protected gas consumers

The Petroleum Division recommended a 334.78% hike on monthly fixed charges on non-protected consumers up to Rs2,000 and a 172% hike in the base tariff.

The hike plan for fixed charges includes an increase of 117.39% over consumption of 150 cubic metres (from Rs460 to Rs1,000), 334.78% on 200 cubic metres up to Rs1,540 and Rs2,000 for the consumers using more than 200 cubic metres.

Earlier, sources within the finance ministry told ARY News that the International Monetary Fund (IMF) asked Pakistan to ‘immediately raise’ the gas tariff.

The IMF is seeking 100pc ‘rise’ in the gas tariff to minimize the losses and circular debt in Pakistan’s gas sector.

The international lender showing concerns about not increasing the gas tariff from July 1 during a virtual meeting with the Pakistan finance ministry officials, demanded the caretaker government of Pakistan to immediately approve the hike in gas tariff, the source claimed.

They further said IMF asked the Pakistan finance ministry that denying the increase in gas tariff is a ‘violation’ of the Standby Agreement.

The Fund suggested for recovery of Rs46 billion loss of gas companies from July to September. During the talks, the IMF officials were informed that caretaker Finance Minister Dr Shamshad Akhtar is in China.