In a move that is set to have a significant impact on households and businesses across the country, the interim federal government has given its nod to a substantial increase in gas prices, based on the recommendations of the Oil and Gas Regulatory Authority (OGRA). This decision comes as a response to the ongoing economic challenges and the need for the government to secure revenue sources.
The caretaker federal cabinet, during a meeting on Monday evening, approved the staggering hike in gas prices, resulting in a whopping 194% surge in costs for domestic users. The effects of this decision are bound to ripple across various sectors of society.
What the Price Hike Entails?
Under this new directive, the monthly fixed gas charges for protected consumers have experienced an astronomical increase, skyrocketing by up to 3900 percent. For domestic consumers, the surge is also substantial, reaching a remarkable 194%. This move has triggered concerns and discussions about its implications for households and businesses alike.
A report by Dawn newspaper revealed that this decision will lead to an average price increase of 300% for protected consumers, with consumption levels ranging from 0.25 to 0.9 cubic meters per month. As a result, their annual gas bills are estimated to rise by 150%.
Government’s Rationale
The Petroleum Division, in a summary following the federal cabinet meeting, conveyed that this hike in gas prices had been approved in accordance with the recommendations provided by OGRA. The cabinet promptly forwarded the summary to the Economic Coordination Committee (ECC) for reconsideration, and it received swift approval on the same day.
Understanding the Key Changes
With the implementation of the new rates, fixed charges for protected consumers have surged from a meager Rs 10 to a significant Rs 400, marking an unprecedented 3900% increase. Furthermore, the tariff for heavy gas consumers has seen a quarter increment, climbing from Rs. 1600 per MMBtu to Rs. 2000.
While the commercial category (oven) will not experience any changes, maintaining a tariff of Rs 697 per MMBtu, the scenario is different for other sectors. Commercial consumers face a substantial Rs 3,900 per MMBtu increase, while cement factories will see a rise of Rs 4,400 per unit. For CNG stations, the increase stands at Rs 3,600 per unit, and export industries will grapple with elevated rates of Rs 2,100 per MMBtu, with captive plants witnessing an increase to Rs 2,400 per MMBtu.
Non-export industries will bear the brunt of this hike, with gas rates increasing to Rs 2,200 per MMBtu, while captive plants will face a rate of Rs 2,500 per unit. The power sector, however, remains unaffected, with gas rates staying the same.
The increase in gas prices is expected to have wide-reaching consequences, prompting discussions about its implications for consumers, industries, and the overall economic landscape. As this decision unfolds, it is certain that stakeholders will closely monitor its effects and engage in necessary adjustments to navigate the evolving energy landscape.
Disclaimer: The information provided here is for informational purposes only and should not be considered as financial advice. The economic and financial landscape is subject to change, and individuals and businesses are encouraged to consult with relevant authorities and experts for guidance and adjustments.
Afsheen Gohar believes in the power of clear, straightforward writing. Her blog posts tackle everyday topics with relatable insights and easy-to-follow advice. With a conversational style, she makes complex subjects feel understandable. She’s dedicated to sharing knowledge and empowering readers to take action. Find her latest posts on trending in social.
