ECC Hikes Gas Tariff by 335% For Domestic Consumers

The Economic Coordination Committee (ECC) of the cabinet approved a hike of 335 percent in the gas tariff for domestic, commercial, and other consumer categories. According to the details, the decision was taken during a meeting of the ECC chaired by Finance Minister Miftah Ismail.

Gas Tariff, Gas Prices — ECC Hikes Gas Tariff by 335% For Domestic Consumers

The meeting discussed and approved the summary sent by the Petroleum Division on the natural gas prices for the fiscal year 2022-23, which is going to come into effect from July 1 to generate about Rs. 666 billion in revenue for the two gas utilities – Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) – during the current fiscal year..

According to the ministry, the gas tariff had not been adjusted per the Oil and Gas Regulatory Authority’s (OGRA) requirements since fiscal year 2015-16, which had resulted in major losses to the two gas utilities. As a result, as of March 2022, there was a buildup of revenue shortfall and tariff disparity totaling Rs. 546 billion.

The revised gas tariff would be notified after the ratification by the Federal Cabinet after the Eid-ul-Azha holidays since these have to be legally in place by July 13 under the law. According to the ECC’s decision, the gas tariff for export and non-export sectors would now be reduced by Rs100 per unit — or million British thermal units (mmBtu) — to Rs1,350 and Rs1,550 per mmBtu, respectively, instead of Rs1,450 and Rs1,650 recommended by the petroleum division.

These rates would still be 58pc higher than existing rates of Rs852 and Rs1,087 per unit, respectively.

Furthermore, the gas tariff for the lowest residential slab of up to 50 cubic metres would be charged at Rs171 per mmBtu, showing an increase of 43pc over the existing rate of Rs121 per unit. The monthly bills of these consumers would go up by 36pc, while the next slab of 100 cubic metres would remain unchanged at Rs300 per unit.

Meanwhile, the third slab (200 cubic metres) and fourth slab (300 cubic metres) would jump 26pc and 151pc to Rs696 and Rs1,856 per unit, while the last existing slabs have been merged into one for all consumers with monthly consumption of 400 cubic metres and would be charged at the same rate of Rs3,712 per unit — almost the cost of LNG.

Those consuming up to 400 cubic metres were currently charged at Rs1,107 per unit who would now face an increase of 335pc and their bills would jump by 346pc. The rate for above 400 cubic meters was currently charged at Rs1,460 per unit, which would now face a 154pc increase to Rs3,712 per unit.

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