Lahore, OCT 29 /DNA/ – The Pakistan Industrial and Traders Associations Front (PIAF) has anticipated that taking the effect of gas price hike into account, the average Consumer Price Index for FY24 will likely reach 25% as the announcement of a massive hike of up to 193% in gas tariff for different sectors of the economy is feared to accelerate the already high inflation.
PIAF Chairman Faheemur Rehman Saigol said that the caretaker government has increased gas tariff with effect from Nov 2023 just before the first IMF review under the $3 billion short-term loan program. This is the second gas price increase in 10 months. The gas price hike is a condition attached to the loan programme. It may pave the way for the release of second IMF tranche of $700 million.
Calling for reverting the decision, he said that the industries that may resort to price increase include fertiliser, cement and steel, which will make agricultural production and construction material more expensive.
The inflation forecast is higher than the State Bank of Pakistan’s (SBP) projection of 20-22%. The central bank governor has said that the expected gas price hike has been incorporated into the inflation forecast.
Faheem Saigol said that feed and fuel stock prices are forecast to increase to Rs580 per million British thermal units (mmBtu) from the current price of Rs510, and to Rs1,580 per mmBtu from the current price of Rs1,500, respectively.
Earlier, the Oil and Gas Regulatory Authority (Ogra) had notified revised gas prices in February 2023 for consumers of Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL), after which Fauji Fertiliser Bin Qasim Limited (FFBL) and Engro Fertilisers jacked up fertiliser prices.
As per proposed revised gas tariff for other categories of gas consumers, the gas price for bulk consumers is proposed to be raised from Rs 1,600/mmbtu to Rs 2,000/mmbtu, while the gas price for special commercial (Roti Tandoor) will remain the same at Rs 697/mmbtu and gas price for commercial consumers is proposed to go up from Rs 1,650/mmbtu to Rs 3,900/mmbtu. Similarly, gas tariff for Liberty Power is proposed to increase from existing Rs 2,406/mmbtu to Rs 3,890/mmbtu while the gas price for Liberty Power is based on HSFO linked formula and not fixed by the government. Likewise, gas price for fertilizer plant of FFBQL (feed) is proposed to be increase from existing Rs 510/mmbtu to Rs 580/mmbtu while no change in gas price for Engro is proposed as Engro Fertilizer Ltd (new plant) has a claim of extended period for feed gas concessionary tariff of US$ 0.7/mmbtu due to non-supply of gas by SNGPL and Sindh High Court has granted stay order to maintain the status quo. However, gas price for fertilizer (fuel) is proposed to be increase from existing Rs 1,500/mmbtu to Rs 1,580/mmbtu. Furthermore, gas price for cement category of gas consumers is proposed to be revised from existing Rs 1,500/mmbtu to Rs 4,400/mmbtu.
He informed that the gas price for export industry (process & captive) is proposed to be revised from existing Rs 1100/mmbtu to Rs 2,050/mmbtu and the gas price for non-export industry (process & captive) is proposed to be increased from existing Rs 1,200/mmbtu to Rs 2,600/mmbtu. Also, the gas price for the category of CNG is proposed to be revised rom Rs 1,805/mmbtu to Rs 4,400/mmbtu.
Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Ltd (SNGPL) are public sector gas utility companies licensed from Oil and Gas Regulatory Authority (OGRA) for purchase, transmission, distribution and sale of gas to consumers in the country.
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