Massive raise in gas tariff notified

[ahlam1399]

ISLAMABAD: The government at last on Saturday exploded the much awaited gas bomb by issuing the notification with rise in gas price for domestic consumers by 16-197.8 percent with one slab benefit and 31 percent for industrial, commercial, power and CNG sector.The new prices will be effective from tomorrow (July 1, 2019). In domestic sector, the first and sixth slab category consumers will face no increase in gas price. The electricity tariff increase of Rs1.50 per unit will also be effective from tomorrow. The government under IMF commitment is to enforce new increase in gas and electricity tariff from July 1 and will report it in IMF executive board meeting that is to meet on July 3, 2019.For fertilizer , the gas prices soared by 62 percent of the cost of delivered gas to Rs300 per unit from Rs185 per MMBTU. The increase in gas prices for all categories of consumers have been linked with the cost of delivered gas in percentage term. The cost of delivered gas stands at Rs738 per MMBTU.In domestic sector, for first slab consumers (up to 0.5 Hm3) will face no increase in gas tariff and they will continue to pay Rs121 per MMBTU for gas usage. As much as Rs121 is the 16 percent of the cost of delivered gas. However, second slab consumers consuming gas up to 1Hm3 will face the increase in tariff by 41 percent and their new tariff will be 300 per MMBTU instead of existing Rs127 per MMBTU.Likewise, the third slab consumers consuming up to 2 Hm3 will face the increase in tariff by 75 percent and they will pay Rs553 per MMBTU instead of existing Rs254 per MMBTU. The fourth slab category consumers using gas up to 3Hm3 will experience the increase in gas price by 100 percent of the cost of delivered gas. They will pay the new gas price of Rs738 per MMBTU instead of prevalent price of RsRs275. The fifth slab domestic consumers using the gas up to 4 Hm3 will face the rise in tariff by 150 percent to Rs1107 per MMBTU from Rs780 per MMBTU. However, the sixth slab category using above 4 Hm3 gas per month will have to pay Rs1460 per MMBTU which is 197.8 percent of the delivered gas.The official of the Petroleum Division told The News that one slab benefit will be having impact of Rs20 billion that has been transferred in the tariff of bulk consumers of Industrial, Commercial Power and CNG sector which has been increased by 31 percent. The tariff for domestic bulk consumers will remain unchanged at Rs780 per MMBTU. The export industry of textile, leather, carpet, surgical and sports will be given the gas at the rate of $6.5 per MMBTU and this export industry will face no increase in gas tariff. The tariff for captive gas use in this category will be charged as per captive category meaning by that at Rs1021 per MMBTU. Monthly bill for special commercial consumers (Roti Tandoor) with consumption up to 3Hm3 will be as per demotic slab.For fertilizer fuel, the price has been increased by 31 percent of cost of delivered gas to Rs1,021 per MMBTU. For powerhouses, the new gas price stands at 824 percent whereas the existing prices stand at Rs629 per MMBTU. For cement gas tariff increased to Rs1277 from Rs975 per MMBTU, and for captive and general industry the new gas tariff stands at Rs1021 per MMBTU and CNG sector the new gas price stands at Rs1283 per MMBTU and for commercial consumers the gas tariff also stands at Rs1283 per MMBTU.However, the press release issued by the government says that Ogra has determined the total revenue requirements for FY2019-20 as Rs541 billion (which includes Rs54 billion on account prior years’ circular debt). Based thereon, Ogra has determined the average cost of supply of indigenous gas as Rs738 per MMBTU.The present tariff can generate a total revenue of Rs397 billion during the year result in a revenue shortfall of Rs144 billion. Therefore, revisions in gas sale prices are inevitable.Even with the increases proposed, 95 percent of the domestic consumers are being subsidised for a total of Rs104 billion.It says that 45 percent of the domestic consumers who are currently paying only Rs121/MMBTU will not face any price increase and their tariff is fixed at only 16 percent of the cost of supply.The objective of the government is to gradually bring the gas tariff closer to the cost of supply for most consumers while protecting the low-end consumers. This is necessary for the long-term sustainability of gas sector.The high-end domestic consumers who consumed 4hm3 or more faced a price increase of up to 143 percent in September while other consumers only had a price increase ranging from 5 percent to 25 percent.The slab structure has been revised to provide one previous benefit to the domestic consumers.95 percent of the domestic consumers are being cross subsidised by the high-end domestic consumers and other sectors.Major reason of the high bills during winter is inefficient and continuous use of gas in geysers for water heating and heaters for space heating.http://feeds.feedburner.com/~r/com/cwEr/~4/Cd9oMMUuOe4

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