Govt to drop gas bomb: tariff to rise by 14pc

Govt to drop gas bomb: tariff to rise by 14pc

Govt to drop gas bombIslamabad: To retain the profitability of the two inefficient state-owned gas utility companies and to enable them to undertake politically motivated gas supply schemes, the government is all set to notify a massive hike of 14 per cent in gas tariff and imposition of gas infrastructure development cess effective from January 01, 2011.

According to the proposed revision in gas sale prices, the tariff for domestic and commercial consumers will be increased by 14 per cent while for other consumer categories increase will accompany cess, which the government plans to utilise for infrastructure development for gas import projects like LNG, Iran Pakistan (IP) gas pipeline and Turkmenistan-Afghanistan-Pakistan and India (TAPI) pipeline. The Oil and Gas Regulatory Authority (OGRA) has allowed uniformed tariff hike for both the gas utility companies, even though the demand for increase in tariff was lower for Sui Southern Gas Company.

The uniform tariff will generate Rs1 billion additional revenue during the second half of the current fiscal year which will be given to provinces under the gas development surcharge. While Cess is estimated to generate Rs22 billion during the remaining six months of the current fiscal year. The tariff for domestic consumers using up to 100 cubic meters or 3.5 mmBTU will be increased from Rs107.87 per mmBTU to 122.95 mmBTU. This will increase Rs448 monthly bill by Rs63 to Rs511 per month. Tariff for consumers using up to 300 units or 10.6 mmBTU will jump from Rs215.74 to Rs245.89 mmBTU. It will cause an increase of Rs313 in the monthly bill of Rs2240 to Rs2553 per month. Tariff of commercial consumers will be increased 14 per cent from Rs526.59 to Rs600.19 per month.

Industrial sector tariff will be increased by 16.97 per cent from Rs434.17 to Rs507.86 mmBTU that will also include Rs13 mmBTU as cess. Power sector tariff of WAPDA and KESC will jump 13.58 per cent to Rs507.86 from Rs447.14 mmBTU, including cess of Rs27 per mmBTU. Tariff for IPPs will increase by 34.57 per cent to Rs507.86 from Rs377.39 mmBTU including cess of Rs70 mmBTU. Cement sector tariff has been increased by 14 per cent from Rs609.09 mmBTU to Rs694.22 mmBTU but no cess has been imposed as at present no gas supplies are given to the sector. Tariff for CNG sector, which is held solely responsible for the gas crisis, will increase by 38.63 per cent in Zone I consisting of KPK, Balochistan and Potohar region from Rs571.87 to Rs792.80 mmBTU, including a cess of Rs141 mmBTU.

While in Zone II consisting of Sindh and Punjab tariff will increase by 27.79 per cent from Rs571.87 to Rs730.80 mmBTU including cess of Rs79. Tariff of feed-stock for old fertiliser plants will be jacked up by 207.10 per cent from Rs102.01 to Rs313.27 mmBTU including a cess of Rs197. While for new fertiliser tariff has been increased only 1.81 per cent from Rs59.59 to Rs60.67 mmBTU and no cess has been imposed.

Gas tariff for direct sales to WAPDA from Kandhkot to Guddu will increase 17.58 per cent from Rs431.94 to Rs507.86 mmBTU including a cess of Rs27. Tariff from Sara and Mari to Guddu will increase 20.89 per cent from Rs420.09 to Rs507.86 mmBTU including a cess of Rs27 mmBTU. Petroleum Minister Dr. Asim Hussain has been claiming that the increase in gas tariff will not impact the people but increase in gas tariff of CNG, industrial, power and fertiliser sector will be indirectly impacting the people and will massively increase inflation. \