Govt to increase gas prices for the fourth time in two years

Government of Pakistan is about to increase gas prices for domestic consumers for the fourth time in two years, ARY News reported on Monday.

According to the reports, the Oil & Gas Regulatory Authority (OGRA) will hold a hearing tomorrow in Lahore on the application submitted by Sui Northern Gas Pipelines Limited (SNGPL), while the hearing for Sui Southern Gas Company Limited (SSGC) request will be held on Nov 8 in Karachi.

Reports suggest that a request has been made to increase the gas prices by 3.66 percent (pc) for Punjab, Khyber Pakhtunkhwa, And Islamabad, and by 53.47pc for Sindh and Balochistan. SNGPL has proposed a hike of Rs. 64.16 per MMBtu, bringing its average price to Rs. 1,810.38 per MMBtu. Meanwhile, SSGC has requested an increase of Rs. 669.07 Per MMBtu, raising its average price to Rs. 1,920.39 Per MMBtu.

The gas companies have requested the price hike effective from July 1, 2024, meanwhile, sources report that domestic consumers have faced an additional burden of Rs.953 billion due to the rising gas prices.

Since Jan 2023, gas prices for domestic consumers have been increased three times, with a single hike under the previous coalition government and two increases during the short tenure of caretake government.

In total, more than Rs. 900 billion has been added to the burden on gas consumers for the past two years.

Back in July of this year, Pakistan and the International Monetary Fund (IMF) held virtual talks on the efforts made in the budget to meet the conditions, IMF later appreciated Pakistan’s tough economic decisions and efforts regarding hike in gas prices.

The IMF was briefed on the measures taken by Pakistan to increase gas prices and other economic decisions in the budget.

On June 29, the International Monetary Fund (IMF) termed budget 2024-25 approval as not enough and demanded Pakistan to do more.

Sources said that IMF wants Pakistan to hike the electricity and gas rates from July 1 and immediately implement the NEPRA decision regarding the increase in gas and power tariff.

IMF also demanded the removal of tax exemptions and subsidies, terming them “essential” for the country’s economic recovery.