Govt increases natural gas prices by 7% for domestic consumers, 10% for CNG stations

[Naveed Yaseen]

ISLAMABAD (January 01 2009): Prime Minister Syed Yosuf Raza Gilani on Wednesday accorded approval of average 7 percent gas tariff increase effective from January 1, 2009. The government has distributed the approved gas tariff increase among the different consumers that range between 3-17 percent. It has passed on 10 percent hike in gas tariff rates for Compressed Natural Gas (CNG) stations.

Petroleum Ministry had proposed the 10 percent increase in CNG prices to discourage its use so that it could be used in other sectors. The gas tariff hike for the commercial consumers and cement industry is 6 percent, 17 percent for private power projects (IPPs).

Petroleum Ministry had proposed the hike of 36 percent in the gas prices for private power producers, however, the Prime Minster approved 17 percent hike for private power producers, sources added.

After the decision of passing on 5 percent gas tariff hike to the domestic consumers falling in the first three slabs using from 50 to 200 cubic meters gas per month, government has abolished the subsidy for the small domestic consumers.

This was the part of the government commitment with International Monetary Fund (IMF) and now there would be no subsidy for the domestic consumers. Prime Minister approved the 6 percent hike for the domestic consumers using over 200 cubic meters gas per month. Petroleum Ministry had proposed 7 percent increase for the said consumers.

According to a notification issued here, the government has abolished the subsidy for the domestic consumers. The government has raised the gas tariff rates from Rs 78.83 per MMBTU to Rs 82.30 per MMBTU for the domestic consumers consuming up to 50 cubic meters per month, Rs 82.07 per MMBTU to Rs 86.17 per MMBTU for 50-100 cubic meters per month, Rs 149.40 per MMBTU to Rs 156.87 per MMBTU for the consumers who will use 100 cubic meters to 200 cubic meters per month.

These consumers were being paid subsidy earlier and now government has abolished the subsidy for these consumers. The new price for the domestic consumers using 200 to 300 cubic meters will be 332.12 per MMBTU.

The government has also increased the gas tariff rates for CNG stations from Rs 388.32 per MMBTU to Rs 427.15 per MMBTU. The gas tariff for the cement industry has been raised from Rs 428.89 per MMBTU to Rs 454.95 per MMBTU. The government has hiked the gas tariff rates for WAPDA and KESC from Rs 329.54 per MMBTU to Rs 349.56 per MMBTU. The gas tariff rates for the Independent Power Producers (IPPs) have been increased from Rs 251.55 per MMBTU to Rs 295.03 per MMBTU.

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