Govt seeks up to 37pc hike in gas tariff

Govt seeks up to 37pc hike in gas tariff

The government’s proposed gas tariff plan seeks to increase prices for 43pc of sale volumes to finance the cost of gas supplies to lower-end consumers.

This step is a part of the fresh cross-subsidy mechanism for prices under the Cabinet Committee on Energy (CCoE) to shift space and water heating to electricity in four peak winter months (November-February).

However, it is yet to be seen if enough electricity-efficient water and space heating appliances are available to facilitate this transition at a cost acceptable and affordable to consumers.

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According to the petroleum division, about 47pc (over 5.3224 million) gas consumers consume about 32pc of gas volumes in the first slab. They are currently charged at the rate of Rs121 per Million British Thermal Unit (MMBtu). Their monthly bill works out at Rs308. Now, another 30pc or 3.424 million consumers burn about 25pc of gas sales in the second slab. They are charged at about Rs300 per MMBtu. Their monthly bill stands at Rs957 currently. This means that about 57pc gas is consumed by 77pc consumers that the petroleum ministry wants to protect with no price change.

On the other hand, the third slab pertains to almost two million consumers with about 18pc of gas consumption. They are charged at Rs553 per unit currently and their monthly bill reaches Rs3,733.

With the current development, the petroleum division has sought their rate to move up by about 24pc to Rs683 per unit – signifying an increase in the monthly bill to Rs4,300.

Furthermore, only 3.3pc (or 371,000) consumers form the fourth slab with monthly consumption of a total of 300 cubic metres and are charged at Rs738 per unit currently, culminating in a monthly bill of Rs8,016. The petroleum division has suggested that the price for this category is to increase by 35pc to Rs1,000 per unit. This would increase their monthly bill by Rs2,260 to Rs10,272.

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