CNG prices to go up by 15% from July 1
Petroleum ministry turns down proposal to increase gas tariff on quarterly basis.
ISLAMABAD:
The government has decided to raise the price of compressed natural gas (CNG) by 15 per cent effective from July 1 in a bid to fulfil the commitment made with foreign lenders. Under the same plan, the price of gas for domestic consumers as well as the fertiliser sector will also be raised to end cross subsidies by ensuring a “uniform tariff” for all consumers.
Minister for Petroleum and Natural Resources Dr Asim Hussain told The Express Tribune that the government has decided to gradually end cross subsidies on gas, a means by which the government provides a subsidy to domestic consumers by charging industrial consumers of gas a higher tariff. The size of the cross subsidy is estimated at close to Rs40 billion – the government wants to bring the price of CNG at level with 65% of petrol prices. Therefore, CNG price will increase by 15 per cent from July 1,” the minister said.
At present, CNG prices are equal to 50% of petrol prices. The minister said that domestic consumers as well as the fertiliser sector were being cross subsidised. “There will be no subsidy for gas consumers in future,” he said.
However, the ministry of petroleum turned down a proposal by the Planning Commission to raise the gas tariff by 15% on a quarterly basis, which would have an accumulative impact of 60% a year to equalise gas prices with other fuels like petroleum products.
Hussain said that the petroleum ministry had opposed a proposal by Planning Commission to raise gas tariff by 15 per cent on a quarterly basis to bring it at par with the prices of other fuels.
He was of the view that it would not be possible for the consumers to afford such a hike in gas tariff. He said that the government will continue raising the tariff on a bi-annual basis. The Oil and Gas Regulatory Authority has decided to increase the gas tariff by Rs5.08 and Rs7.54 per MMBTU (million British Thermal Units) for consumers of the Sui Southern Gas Company and Sui Northern Gas Pipeline Limited effective from July 1.
The textile sector in particular has been agitated by cross subsidies provided to domestic and fertiliser sector, saying that it was resulting in an increase in the cost of production.
Published in The Express Tribune, May 29th, 2011.
The government has decided to raise the price of compressed natural gas (CNG) by 15 per cent effective from July 1 in a bid to fulfil the commitment made with foreign lenders. Under the same plan, the price of gas for domestic consumers as well as the fertiliser sector will also be raised to end cross subsidies by ensuring a “uniform tariff” for all consumers.
Minister for Petroleum and Natural Resources Dr Asim Hussain told The Express Tribune that the government has decided to gradually end cross subsidies on gas, a means by which the government provides a subsidy to domestic consumers by charging industrial consumers of gas a higher tariff. The size of the cross subsidy is estimated at close to Rs40 billion – the government wants to bring the price of CNG at level with 65% of petrol prices. Therefore, CNG price will increase by 15 per cent from July 1,” the minister said.
At present, CNG prices are equal to 50% of petrol prices. The minister said that domestic consumers as well as the fertiliser sector were being cross subsidised. “There will be no subsidy for gas consumers in future,” he said.
However, the ministry of petroleum turned down a proposal by the Planning Commission to raise the gas tariff by 15% on a quarterly basis, which would have an accumulative impact of 60% a year to equalise gas prices with other fuels like petroleum products.
Hussain said that the petroleum ministry had opposed a proposal by Planning Commission to raise gas tariff by 15 per cent on a quarterly basis to bring it at par with the prices of other fuels.
He was of the view that it would not be possible for the consumers to afford such a hike in gas tariff. He said that the government will continue raising the tariff on a bi-annual basis. The Oil and Gas Regulatory Authority has decided to increase the gas tariff by Rs5.08 and Rs7.54 per MMBTU (million British Thermal Units) for consumers of the Sui Southern Gas Company and Sui Northern Gas Pipeline Limited effective from July 1.
The textile sector in particular has been agitated by cross subsidies provided to domestic and fertiliser sector, saying that it was resulting in an increase in the cost of production.
Published in The Express Tribune, May 29th, 2011.