Gas price increased amid Rs2,100 billion circular debt

The Caretaker Federal government on Monday approved increase in price of natural gas for different categories of the consumers as advised by the Oil and Gas Regulatory Authority (OGRA) with effect from 1st November 2023.

The Ministry of Petroleum Division clarified that gas prices remain unchanged for protected consumers using 25 to 90 cubic meters per month. However, fixed charges for these protected consumers have been raised.

The Fixed Charges for domestic consumers

The new tarrif includes a whopping monthly fixed charge increase from Rs10 per month to Rs400 per month for consumers burning 0.25 hm3 to 0.9 hm3 of piped gas.

The fixed monthly charge for consumers burning  upto 1.5 hm3 of piped gas is Rs1,000 and over 1.5 hm3 consumers is Rs2,000.

The new gas rates for domestic consumers

For users consuming Up to 0.25 hm3 per month, the gas price has increased to Rs 300 per mmbtu.
For users consuming Up to 0.6 hm3 per month, the gas price has increased to Rs 600 per mmbtu.
For users consuming Up to 1 hm3 month, the gas price has increased to Rs 1000 per mmbtu.
For users consuming Up to 1.5hm3 per month, the gas price has increased to Rs 1200 per mmbtu.
For users consuming Up to 2 hm3 per month, the gas price has increased to Rs 1600 per mmbtu.
For users consuming Up to 3 hm3 per month, the gas price has increased to Rs 3000 per mmbtu.
For users consuming Up to 4 hm3 per month, the gas price has increased to Rs 3500 per mmbtu.
For users consuming above 4 hm3 per month, the gas price has increased to Rs 4000 per mmbtu.

The Caretaker Minister for Energy and Petroleum Muhammad Ali on Tuesday said that Sui companies would have sustained losses of more than Rs400 billion if gas prices were not raised.

“In 2013-14 losses suffered by gas companies stood at Rs18 billion, which rose to Rs889 billion in 2022-23, after the latest gas price increase, the circular debt in the petroleum sector would not grow,” he added.

The interim minister reiterated that the overall circular debt of the energy sector rose to Rs2,100 billion. “If the gas prices were not increased, the circular debt would have increased to Rs2,480 billion by June 2024,” said the minister.

The cabinet referred back the proposed increases for processing units of non-export and export industries, captive power plants of non-export and export industries and the compressed natural gas (CNG) consumers to the Economic Coordination Committee (ECC) of the Cabinet for further deliberations.