News
Sunday, July 03, 2011
PM’s approval sought for hike in gas prices
* Ministry wants price up by 15% for domestic, commercial consumers, 36.26% for IPPs, 96.06% for fertiliser plants, 18.43% for industries * Price for CNG stations to go up by 69%
By Sajid Chaudhry
ISLAMABAD: The Ministry of Petroleum and Natural Resources has moved a summary to Prime Minister Yousaf Raza Gilani seeking approval to hike in gas tariff by 15 percent for domestic and commercial consumers, 36.26 percent for the Independent Power Producers (IPPs), 96.06 percent and 18.43 percent for old fertiliser plants and the industrial sector, respectively. In the summary, an increase of 69.06 percent has been recommended in gas tariff to bring its consumer price at 65 percent parity of petrol.
The petroleum ministry has also sought the approval of the prime minister to impose a ban on bulk meter connections to housing colonies.
As per reports, bulk meters at existing colonies will be gradually shifted to stand-alone meters at individual premises.
The Economic Coordination Committee (ECC) had, in its recent meeting, deferred the proposed plan for raise in gas tariff, and directed the petroleum ministry to seek the premier’s approval.
“At present, price of gas to be imported from Iran stands at Rs 1800 per mmbtu and liquefied natural gas (LNG) will cost the same price,” Minister for Petroleum and Natural Resources Dr Asim Hussain said during an informal talk with reporters on Saturday, adding that it had to be weighted average as nobody would be able to afford it.
According to the summary, the ministry has proposed to increase by 15 percent gas tariff for domestic, including bulk domestic consumers, commercial, cement plants and power plants of the WAPDA and KESC. 18.43 percent gas price hike has been recommended for the industrial sector, including textile industry, captive power and fuel stock of fertiliser plants, to equate price of gas for them with that fixed for the WAPDA and KESC to bring uniformity.
The ministry has sought approval to increase gas tariff by 36.26 percent for the IPPs to equate it with gas sale price of the WAPDA and KESC. Price of gas for filling stations has been recommended to increase by 69.06 percent to bring its consumer price at 65 percent parity of petrol. Gas price for the fertiliser sector has been proposed to be hiked by 96.06 percent to use gas as feedstock for old plants for gradual elimination of subsidy.
There will be no change in gas sale price for feedstock of new plants and no gas allocation would be made for the fertiliser sector in the future at subsidised rate in any form.
The Oil and Gas Regulatory Authority (OGRA) had recommended to increase gas price by 13.55 percent for domestic, commercial,, general industry, CNG stations, cement factories, the WAPDA, KESC and IPPs.
The authority has also recommended to maintain the existing price of gas to use as feedstock for the fertiliser sector. The petroleum minister said that well head price of domestic gas was Rs 464 per mmbtu and some consumes were paying more and some less that was creating a problem of circular debt.
“There is a distortion in prices and we are moving to correction,” Hussain said, adding it would be difficult to use imported gas from Iran without rationalisation in
gas prices.
“If there is no rationalisation in gas price who would take gas imported from Iran with its existing price at Rs 1800 per mmbtu.”Courtesy www.dailytimes.com.pk