ECC Approves Another Massive Increase in Gas Prices

While fulfilling another condition of the International Monetary Fund (IMF), the Economic Coordination Committee (ECC) of the Cabinet Wednesday approved enhancement of gas prices up to 35.13 percent.

According to the Finance Division, the Federal Minister for Finance Dr Shamshad Akhtar presided over a meeting of the ECC of the Cabinet.

The summary of the Petroleum Division regarding “Natural Gas Sale Pricing FY 2023-24 (Effective – 1st February, 2024)” was deliberated upon at length just a day before the IMF deadline.

Sources said that an average increase of 35.13 percent in tariff was approved for the gas consumers of Punjab, KP including Islamabad. On the other hand, an average increase of 8.57 percent in the tariff for the gas consumers of Sindh and Balochistan has also been approved.

Sources said that ECC has also approved Rs 1673.82 per MMBTU new tariff (Rs. 435.14 per MMBTU increase tariff) for Sui Northern. On the other hand, the chair on the recommendation of the Petroleum Division approved Rs 1466.40 per MMBTU (Rs. 115.72 per MMBTU increase tariff) for Sui Southern.

Reportedly, the Ministry of Petroleum has proposed to increase existing tariff slabs for protected domestic consumers in the range of Rs. 80-100/MMBTU. For unprotected consumers, a gradual increase has been proposed in the tariff slabs ranging from Rs. 200 to 300/MMBtu, sources added.

Sources said that the petroleum ministry also proposed to increase gas rates for Bulk Domestic and Special Commercial (Roti Tandoor).

The tariff for Bulk consumption is proposed to be increased from Rs. 2,000/MMBtu to Rs. 2,900/MMBtu. A flat tariff of Rs. 700/MMBtu will be charged to Special commercial (Roti Tandoor) category. The tariff for special commercial category has not been changed since 2015.

Sources said that the petroleum division also proposed to increase feed and fuel gas price for Engro Fertilizer and Fauji Fertilizer Bin Qasim plant to be Rs. 760/MMBtu and Rs. 1,750/MMBtu. The effective date for revised gas tariff for Engro Fertilizer shall be 1st March, 2024.

In addition, two other plants namely Agritech and Fatima Fert are currently getting RLNG from SNGPL network. The proposed price for these plants will be Rs. 1,596/MMBtu which is the average prescribed price in case these plants are offered system gas on SNGPL.

Sources said that ECC also approved to abolish the existing categories of export and non-export.

The existing tariff for process use of gas is Rs. 2,100/MMBtu and Rs. 2,200/MMBtu for export and non- export industry respectively.

Meanwhile, PD has also proposed to revise tariffs for the CNG sector from Rs. 3600/MMBtu to Rs. 3,750/ MMBtu equivalent to the RLNG price being the fuel for majority CNG producers in the country.

After discussion ECC decided that revision of sale price/ tariff should be consistent with revenue requirements of the Sui companies.