ISLAMABAD-The Economic Coordination Committee (ECC) of the Cabinet on Monday approved massive increase in gas prices.
A summary submitted by the Ministry of Energy (Petroleum Division) regarding the revision of the natural gas sale pricing for the FY2023-24 was also considered by the forum. The ECC, after detailed discussion and deliberation, approved the summary as per the tariff schedule submitted by the Ministry, prospectively w.e.f. 1st November, 2023, instead of 1st October, 2023.
To stop the accumulation of petroleum sector circular debt, the Petroleum Division has proposed massive hike in fixed monthly gas charges for the poorest protected consumers and upto 193.33 percent in gas tariff for various categories of consumers. For non-protected gas consumers using from 0.25hm3 to 1.5hm3, a hike of Rs540/month or 117.39 percent has been proposed in monthly fixed charges taking it from the existing Rs460/month to Rs1,000/month. For non-protected gas consumers using from 2hm3 and above, an increase of Rs1,540/month or 334.78 percent has been proposed in fixed monthly charges.
The Petroleum Division has proposed a hike from 29 percent to 172 percent for domestic gas consumers, upto 193.33 percent for industries and a hike of 143 percent has been proposed for CNG sector, the documents revealed. Although, no revision in gas prices has been recommended for the four slabs of protected consumers, utilising upto 0.25 hm3, 0.5hm3, 0.6hm3 and 0.9hm3 gas, an increase of 3,900 percent from the existing Rs10/month to Rs400/month in fixed monthly charges has been proposed. A hike of Rs2,595/MMBtu (or 143.77 percent) has been proposed for the supply of gas to CNG stations taking its supply rate from the existing Rs1,805/MMBtu to Rs4,400/MMBtu.
For the non-protected consumers using gas upto 0.25 hm3, a hike Rs100/MMBtu (or 50 percent) has been proposed, taking its price from the existing Rs200/MMBtu to Rs300/MMBtu. For the consumers using 0.5hm3 gas, an increase of Rs300/MMBtu (or 100 percent) has been recommended, taking the rate from existing Rs300/MMBtu to Rs600/MMBtu. On the consumption of 1hm3, a hike of Rs600/MMBtu (or 150 percent) has been proposed in tariff, taking its price from Rs400/MMBtu to Rs1,000/MMBtu; on upto 1.5hm3 consumption, a hike of Rs600/MMBtu (or 100 percent) has been proposed, taking its price from Rs600/MMBtu to Rs1,200/MMBtu. For the consumers using upto 2hm3 gas, a hike of Rs800/MMBtu(or 100 percent) has been proposed, taking its price from the existing Rs800/MMBtu to Rs1,600/MMBtu. On consumption of upto 3hm3, a hike of Rs1,900/MMBtu (or 172.73 percent) from the existing Rs1,100/MMBtu to Rs3,000/MMBtu, while for the consumers using 4hm3, a raise of Rs1,500/MMBtu (or 75 percent) from the existing Rs2,000/MMBtu to Rs3,500/MMBtu. However, for the consumers using above 4hm3, a hike of only 29.03 percent or Rs900/MMBtu has been proposed, taking its price from Rs3,100/MMBtu to Rs4,000/MMBtu.
Federal Minister for Finance, Revenue, and Economic Affairs Dr. Shamshad Akhtar presided over a meeting of the Economic Coordination Committee (ECC) of the Cabinet. The meeting considered various agenda points and summaries submitted by the Ministries of Industries and Production, Ministry of Energy and Petroleum, Ministry of National Food Security and Research, Earthquake Reconstruction and Rehabilitation Authority (ERRA), and the Ministry of Finance.
The Ministry of Industries and Production submitted a summary regarding the measures to meet the requirements of urea for Rabi season 2023-24. The ECC discussed the proposal in detail and approved immediate import of 200,000 MT of urea fertilizers. The meeting also directed that uninterrupted supply of gas for the fertilizer industry to be ensured. It was also decided that the provinces will be asked to act more proactively to bear the importation cost.
The ECC also discussed and approved the summary submitted by the Ministry of National Food Security and Research regarding the cost efficient import of 1.00 MMT of milling wheat for the year 2023-24, through TCP under through open tendering process, to maintain the strategic reserves. The ECC also approved the proposal for encouraging the private sector to import specified milling wheat under Ministry of Finance Notification of 14th November 2008, while meeting the criteria envisaged in the import policy order 2022. The ECC also directed the Ministry to conduct a third party verification of the wheat stock in the country. The meeting also deliberated over a summary submitted by the Earthquake Reconstruction and Rehabilitation Authority (ERRA) for approval of the technical supplementary grant of Rs. 484 million to meet critical expenditure on pay and allowances of 415 contract and project employees from July 2023 onwards. The ECC directed the Ministry of Planning, Development and Special Initiatives to identify the savings to finance the salaries of the ERRA employees.
A summary of Ministry of Finance regarding the establishment of the National Credit Guarantee Company Limited to support the credit enhancement of the small and medium enterprises (SMEs) was also considered and approved by the forum. The meeting was attended by the Minister for Commerce, Industries, & Production, Gohar Ijaz, Minister for Communications, Railways, & Maritime Affairs, Shahid Ashraf Tarar, Minister of Planning, Development and Special Initiatives Sami Saeed, Minister for Power & Petroleum, Muhammad Ali, Minister for IT & Telecom, Dr Umar Saif, Advisor to PM on Finance, Dr Waqar Masood, Deputy Chairman Planning Commission, Muhammad Jahanzaib Khan, Chairman SECP, federal secretaries, and other senior government officials of the relevant ministries.