Govt Approves Gas Price Hike Effective from November 1

Islamabad: The caretaker government has approved a substantial increase in gas prices, set to take effect from November 1, causing concern among inflation-hit consumers.

The new tariff structure introduces steep hikes, with local gas tariffs surging by up to 173% for non-protected domestic consumers, 136.4% for commercial users, 91% for export-related businesses, and 83% for non-export industries.

As per the approved summary, fixed monthly charges for protected consumers will see a substantial upward revision, increasing from Rs10 to Rs400. For non-protected consumers, the monthly charges will rise from Rs460 to Rs1000. Those falling within higher usage slabs will now pay up to Rs2000 per month.

For non-protected consumers, the price per million British thermal units (mmbtu) will be Rs121 for usage up to 0.25 cubic meters, Rs150 for usage up to 0.5 cubic meters, Rs200 for usage up to 0.60 cubic meters, and Rs250 for usage up to 0.9 cubic meters. Rates for users consuming 1 cubic meter of gas per month have surged from the previous Rs400 per mmbtu to Rs1,000 per mmbtu.

Those with gas usage of up to 1.5 cubic meters, who were previously paying Rs600 per mmbtu, will now face charges of Rs1,200 per mmbtu. Small commercial users, including local tandoors, will be required to pay Rs697 per mmbtu from November 1.

The power sector is set to see an increase in gas prices ranging from Rs1,050 to Rs3,890 per mmbtu, while the cement industry will face rates of Rs4,400 per mmbtu. Rates for the export industry have been set between Rs2,100 and Rs2,400 per mmbtu, with non-export industries paying between Rs2,200 and Rs2,500 per mmbtu.

The Power Division, in a press release, explained that the interim government had to increase gas prices following the advice of the Oil and Gas Regulatory Authority to prevent an additional Rs400 billion from being added to the already mounting circular debt.

The statement emphasized that 57% of domestic gas connections fall into the protected category, where no increase in gas prices will be applied. It further noted that in the name of affordability, some of the country’s most profitable businesses have been availing the cheapest natural gas, disproportionately benefiting certain sectors while affecting the lowest income classes, including poor farmers and small-scale industries.