The caretaker government of Pakistan has given the green light to a significant increase in natural gas prices for various consumer categories. The Ministry of Petroleum Division has shared details of these adjustments, following advice from the Oil and Gas Regulatory Authority (Ogra). The new tariff is scheduled to become effective on November 1.
Gas prices will remain unaltered for protected consumers who use 25 to 90 cubic meters per month, although their fixed charges have been raised. Here’s a breakdown of the price adjustments:
- Users consuming 25 cubic meters per month will see the gas price increase from Rs 200 to Rs 300 per mmbtu.
- For those consuming 60 cubic meters per month, the price will rise from Rs 300 to Rs 600 per mmbtu.
- Monthly consumption of 100 cubic meters will now cost Rs 1000 per mmbtu, up from Rs 400.
- Further adjustments include an increase from Rs 600 to Rs 1200 per mmbtu for those using 150 cubic meters per month and from Rs 800 to Rs 1600 per mmbtu for those consuming 200 cubic meters.
- Users consuming 300 cubic meters will now pay Rs 3000 per mmbtu, up from Rs 1100.
- Monthly consumption exceeding 400 cubic meters will result in a gas price increase from Rs 2000 to Rs 3500 per mmbtu.
- Those consuming over 400 cubic meters will see an increase from Rs 3100 to Rs 4000 per mmbtu.
The Economic Coordination Committee (ECC) had initially approved the gas price hike on October 23, citing the country’s depleting gas reserves, which have been dwindling at a rate of 5 to 10 percent annually. This has placed a growing financial burden on the government due to the need for gas imports, resulting in an accumulated debt of Rs 2.1 trillion, stemming from past gas price adjustments.
On October 30, 2023, the Federal Cabinet referred the summary back to the ECC for reconsideration. The Ministry of Energy has noted that even highly profitable businesses are currently utilizing natural gas at lower rates, making the decision to raise gas prices a challenging one for the caretaker government. Notably, the last gas price increase took place approximately two and a half years ago, contributing to a revenue of 461 billion rupees for the national exchequer.
Initially, the Federal Cabinet postponed the decision on gas prices during an ECC meeting, directing the ECC to review the matter. However, the Ministry of Petroleum subsequently clarified that, as per the ECC’s declaration, gas prices would indeed be raised. This decision is expected to have significant implications for both businesses and consumers alike.