ABDUL RASHEED AZAD

ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) on Monday announced an increase of up to 38.5 percent in gas prices for consumers effective from Sept 1 (today). Addressing a press conference, Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi and Information Minister Pervaiz Rasheed said the government did not pass the full impact of international oil price decline to end consumers with a view to bridging a revenue shortfall amounting to Rs 60 billion. The regulator, Ogra, also notified a reduction in CNG prices following a cut in petroleum products’ prices. For the CNG consumers of Sindh and Punjab the commodity price has been reduced by Rs 4 per kg from Rs 71.50 per kg to Rs 67.50 per kg; and for the consumers of Balochistan, Khyber Pakhtunkhwa and Rawalpindi region it has been decrease by Rs 0.53 per kg from Rs 76.35 per kg to Rs 75.82 per kg. However, the new price will not apply to CNG stations using imported Liquefied Natural Gas (LNG).

“The increase in consumers’ gas price by 38.5 percent will help recover Rs 70 billion to meet a revenue shortfall of gas utilities Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGCL),” Khaqan added. However, the two gas utilities had sought an increase of 45 percent in consumers’ gas prices.

The price for first slab domestic consumers using up to 100 units per month has been increased by 3.8 percent from Rs 106 to Rs 110 per Million British Thermal Unit (Mmbtu).The gas price for domestic consumers falling in second slab using 100-200 units has been hiked by 3.8 from Rs 212 to Rs 220 per mmbtu and those in third slab using above 300 units raised by 13 percent from Rs 531 to Rs 600 per mmbtu.

The gas price for cement sector has been increased by 1 percent from Rs 743 to Rs 750 per mmbtu; CNG Rs 600 to Rs 700 per mmbtu (16.7 percent); commercial Rs 637 to Rs 700 per mmbtu (9.9 percent); general industry Rs 488 to Rs 600 per mmbtu (23 percent); captive power from Rs 573 to Rs 600 per mmbtu (4.8 percent). The government increased gas price for fertilizer sector (feed stock for new plants) from Rs 68 to Rs 72 per mmbtu (5.9 percent); and (feed stock for old plants) Rs 123 to Rs 200 per mmbtu (38.5 percent). The price of gas as fuel has been increased by 23 percent from Rs 488 to Rs 600 per mmbtu.

The petroleum minister claimed that government had raised the subsidy for domestic consumers to Rs 75 billion. He said that gas prices were required to be revised after every six months to meet revenue requirements of gas utilities. “The last revision was made on January 2013,” he pointed out.

Khaqan said that the government had faced a shortage of Rs 90 billion revenue in petroleum sector due to a cut in oil prices. However, by retaining some portion of reduction in oil prices by increasing tax rate the government will generate an estimated Rs 30 billion from the oil consumers.

“The government is still facing a revenue shortfall of Rs 60 billion in petroleum sector and therefore, petroleum ministry had recommended not to pass on the full impact of declining oil prices to the end consumers to bridge revenue shortfall,” he said, adding that the Prime Minister decided to pass on some relief to consumers by reducing the price of petrol by Rs 3 per litre. He said that the government had not increased oil prices in July causing a revenue loss of Rs 3 billion to the national exchequer. He said that Pakistan was still among those ten countries where oil prices were the lowest in the world.

Keeping in view changes in international crude oil prices, Ogra had recommended the government to cut petrol price by Rs 6.14 per litre, the most widely used fuel by cars and motorcycles owned by middle class commuters. The price of high-speed diesel, which is used by goods transporters and farmers, was recommended to be cut by Rs 7.40 per litre, LDO’s Rs 6.48per litre and Kerosene oil’s Rs 7.07 per litre.

However, the government cut the price of petrol by Rs 3 per litre from Rs 76.76 to Rs 73.76 per litre, diesel’s by Rs 3.01 from Rs 85.05 to Rs 82.04, HOBC’s by Rs 3 per litre from Rs 82.79 per litre to Rs 79.79 per litre, kerosene oil’s Rs 3 per litre from Rs 60.11 to Rs 57.11 and Light Diesel Oil (LDO’s) Rs 3 per litre from Rs 56.59 to Rs 53.59 per litre.

Khaqan said that petroleum ministry had moved a summary to Council of Common Interests (CCI) to regulate the prices of Liquefied Petroleum Gas (LPG) which would result in reducing its price for domestic cylinder to Rs 900. At present, he said that its price was ranging between Rs 750 to Rs 2000 per cylinder. He also said that LNG deal with Qatar would be signed in September. He said that the impact of imported LNG would have borne by its users.