News
Thursday, December 29, 2011
Increase in gas tariff for all sectors proposedBy Zeeshan Javaid
ISLAMABAD: The federal government decided in principle on Wednesday to increase the gas tariff of natural gas consumers in all sectors following the combined impact of the gas tariff and gas infrastructure development bill to collect a revenue of Rs 38 billion for gas import projects.
According to well-informed sources associated with energy managers, the Ministry of Petroleum and Natural Resources proposed a record hike of gas prices for residential and commercial consumers of 13.98 percent, while a 207 percent price hike in the gas tariff for fertiliser plants had been projected for final approval, which Primes Minister Yousaf Raza Gilani has yet to give.
The petroleum ministry sought an increase of 16.97 percent in the gas tariff of the general industry, 34.57 percent for Independent Power Producers (IPPs), 13.98 percent in the cement industry, 13.98 percent for Condensed Natural Gas (CNG) and 13.58 percent in the gas tariff of thermal power plants run by the Water and Power Development Authority (WAPDA) and Karachi Electric Supply Company (KESC).
In the case of implementation of infrastructure development from January 1, 2012, Rs 79 to Rs 141 per MMBTU would likely be added in the tariff of the Condensed Natural Gas (CNG) sector, Rs.197 per MMBTU in the tariff determined for fertiliser plants, Rs 13 for industrial sector, Rs 27 per MMBTU would be additionally charged from the thermal power plants under the possession of WAPDA and KESC.
According to estimates acquired by sources in the Ministry of Petroleum and Natural Resources, after the implementation of the gas infrastructure development bill, a new tariff of Rs 600.19 would be levelled per MMBTU for the commercial sector, Rs 507.86 for WAPDA, KESC, IPPs and the industrial sector, Rs 694 for the cement industry, Rs 792.80 for the CNG sector region-I and Rs 730.80 for region-II, Rs. 313.27 per MMBTU for old fertiliser plant, Rs 60.67 for old plants and Rs. 507.86 per MMBTU for WAPDA Guddu unit.
Sources maintained that two new money bills - Petroleum Levy (Amendment) Bill 2011 and Gas Infrastructure Development Cess (GIDC) Bill 2011 would remain applicable for the next 15 to 20 years so as to generate the required funds for the construction of Rs100 billion for the Iran-Pakistan Gas Pipeline, the laying of the Rs100 billion LNG pipeline from Karachi to Lahore, $7.6 billion for the Turkmenistan-Afghanistan-Pakistan-India (TAPI) Gas Pipeline and to make expensive imported fuel affordable for local consumers by providing a subsidy.
Domestic consumers of natural gas have been exempted from the GIDC, but the fertiliser sector will be required to collect Rs11.10 billion, CNG stations of the country, Rs11.88 billion, the industrial sector, Rs 4.62 billion, MGCL Rs 430 million, PPL Rs 460 million and IPPs, Rs.5.88 billion, from their consumers.
Petroleum Minister Dr. Asim Hussain said that the government would also be required to provide a subsidy on gas to be imported from Iran and Turkmenistan, as the price of imported gas would be much higher than the local price. LNG will cost $16 to $18, gas imported from Iran, $13 to $14 and gas from TAPI, $12 to $13 per unit.
The Oil and Gas Regulatory Authority (OGRA) also proposed that the price of CNG gas for local consumers be increased to 46 percent because of the severe gas shortage in the country.
A document revealed that the authority was seeking a proposed increase of Rs 30.89 per kilogramme for consumers in Balochistan and the Potohar region and Rs 24.58 per kg for Sindh and Punjab from January 1, 2012.
Courtesy www.dailytimes.com.pk