The ‘safe’ gas consumers across the country are facing a phased increase in tariff with the help of Rs 108 billion subsidy, while the ‘unsafe’ consumers are facing a huge increase in gas tariff. The monthly fixed charges are unchanged from 1 February 2024.
The Oil and Gas Regulatory Authority (OGRA) has issued a notification for the revised sale price of natural gas as per the decision taken in the federal cabinet meeting on Thursday.
The hike in natural gas rates is subject to a condition imposed by the International Monetary Fund, which was given a February 15 deadline. The IMF had also agreed to continue cross-subsidies for ‘protected’ consumers until financial assistance was provided under the Benazir Income Support Programme.
According to the notification, the rate may increase by Rs 2,000 to Rs 2,900 per mmbtu for mass consumption only. The tariff for special commercial category (Roti Tandoor) will be Rs 700 per mmbtu which is unchanged from 2015.
The rate for Engro Fertilizer Company will be Rs 0.70 per mmbtu on 29 February 2024 and Rs 1597 per mmbtu from 1 March 2024. A fixed rate of Rs 1597 per mmbtu will be applicable for Agritech, Fatima Fertilizer and Fuji Fertilizer plants based on average stated prices.
The feed gas price for Engro Fertilizer will be increased from Rs 200 to Rs 1797 per mmbtu which is a 700% increase. Gas price for Fuji Fertilizer Bin Qasim will be increased from Rs 580 to Rs 1597 per mmbtu which is 175% profit.
Agritech and Fatima Fertilizer are currently receiving RLNG from SNGPL network. The approved rate hike for them is Rs 1597 per mmbtu with an increase of 29%.
The gas tariff has been increased from Rs 3600 to Rs 3750 per mmbtu which is equivalent to the price of RLNG. It indicates the total cost of fuel for CNG producers.
The federal cabinet in its meeting on Thursday increased the gas rates for residential units by 66 percent and for fertilizer plants by 700 percent, which is in line with the revenue target of Sui Northern and Sui Southern of Rs 242 billion.
Ogra had indicated a 36% and 5% hike in gas rates for Sui Southern and Sui Northern respectively for the current financial year. Sui Northern needs Rs 592 billion and Sui Southern needs Rs 310 billion in revenue.
The total revenue of both the gas companies is expected to be Rs 902 billion at the rate of Rs 1592 per mmbtu.