- Petroleum Division to present summary for hike before ECC being held on Monday (today)
- Caretaker govt taking steps for release of $700m tranche under $3b standby loan agreement
ISLAMABAD: ISLAMABAD: The caretaker government has started preparations to approve a massive hike in gas tariff up to 200% and a summary would be presented before the Economic Coordination Committee (ECC) scheduled to be held on Monday (tomorrow), ahead of the upcoming IMF review for release of $700 million tranche under $3 billion standby loan agreement.
According to officials sources, the caretaker government’s has taken steps to meet prior conditions including a proposal to increase gas tariffs for various sectors by up to 193 per cent in the next month to meet the prior conditions in an effort to secure a $700 million tranche in the upcoming International Monetary Fund (IMF) review under the $3 billion standby loan agreement
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.
According to sources, the Petroleum Division’s proposal outlines a substantial 193 per cent increase in gas tariffs and a 172 per cent hike in gas prices for domestic consumers.
Additionally, it suggests a 193 per cent increase in gas prices for other consumer categories and a notable adjustment in fixed monthly charges for protected consumers, rising from Rs10 to Rs400.
The Petroleum Division suggested increase in the gas tariff by 200% for different categories of consumers and the hike in monthly fixed charges for protected consumers by 3,900% from Rs10 to Rs400.
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.
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 had informed 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.
