Gas consumers to face up to 200% price hike

[Nilgiri]

https://tribune.com.pk/story/1995493/2-gas-consumers-face-200-price-hike/

Gas consumers to face up to 200% price hike
By Zafar Bhutta
Published: June 19, 2019
TWEET EMAIL

PHOTO: FILE

ISLAMABAD: Domestic consumers are set to face up to 200% hike in gas prices from July 1, mainly due to the rupee depreciation against the dollar. However, the Petroleum Division has proposed no increase in gas prices for the elite who use gas in bulk.

The Economic Coordination Committee (ECC), scheduled to meet on Wednesday (today), is likely to approve the proposed hike in gas tariff, an official said. The Pakistan Tehreek-e-Insaf (PTI) government has already increased gas prices by up to 143% during the ongoing financial year.

The Petroleum Division has proposed 25% increase in gas prices for domestic gas consumer in the first slab. Fifty per cent (50%) increase is recommended for the second slab, 75% for the third slab, 100% for the fourth slab, 150% for the fifth slab and 200% for the sixth slab gas consumers.

However, no increase has been proposed for the bulk gas consumers.


With the proposed increase in gas prices, the bill for consumers falling in the first slab will go up from existing Rs285 to Rs422 per month. Bill for slab-two consumer will go up from Rs572 to Rs1,219; bill for slab-three from Rs2,305 to Rs4,009; bill for slab-four from Rs3,589 to Rs7,995 and bill for slab-five from Rs13,508 to Rs14,373 per month.

The Oil and Gas Regulatory Authority (Ogra) had recommend 31% and 20% across the board increase respectively in gas prices for all categories of the Sui Northern Gas Pipeline Limited (SNGPL) and the Sui Southern Gas Company (SSGC) consumers.

The main reason for increase in gas prices is said to be depreciation of rupee against dollar. Ogra had set Rs150 per US dollar exchange rate to determine prices of gas for consumers in the next financial year.

The SNGPL had demanded 144% average increase in gas prices. However, Ogra allowed 46% average hike for its consumers. The SSGC had demanded 30% increase in gas prices. But the regulator allowed 28% average price increase for the next financial year.

Ogra had recommended 18% increase in gas price for slab-one consumers, 29% for slab-two, 32% for slab-three, 12% for slab-four, and 4% for both slab-5 and slab-six consumers.

Experts say Ogra allowed increase in gas prices to enable the government avail the International Monetary Fund (IMF) bailout package. The government has already agreed with the IMF to increase prices of gas and electricity.

The SNGPL had estimated its revenue requirement to be Rs1223.7 billion that included Rs309.5 billion for ongoing financial year and Rs165.12 billion shortfall for previous year’s adjustment.

The regulator allowed total revenue of Rs293.3 billion including Rs264.58 billion for the next fiscal year and Rs28.7 billion revenue for previous years’ adjustments. The gas utility has been allowed to recover this revenue shortfall from the gas consumers by increasing prices of gas by 47%.

No oil, gas reserves found off Pakistan shore

The regulator has also allowed the SNGPL to build 8,000 kilometers distribution network with an initial cost of Rs5.3 billion. It also allowed Rs1.12 billion to recover from the gas consumers for rehabilitation of system and Unaccounted for Gas (UFG) control.

The authority allowed Rs344 million for 450 industrial and 5,000 commercial gas connections. An amount of Rs3.2 billion has been allowed for 400,000 new domestic gas connections.

The regulator allowed 6.30% UFG. Out of the total gas theft amounting to 49.06 billion cubic feet per day, Ogra has put the burden of 29.2 bcfd on consumers. The total UFG has been assessed at 10.5%.

The SSGCL had projected a total revenue shortfall of Rs254.7 billion for next financial year 2019-20 and Rs24.9 billion for previous years’ adjustment.

The regulator allowed passing on Rs270.7 billion that include Rs245.8 billion for next financial years’ adjustment and Rs24.9 billion for previous years’ adjustment. The total UFG of the company has been calculated at 15.69%. The regulator allowed 6.30% from the gas consumers amounting to Rs19.2 billion.

================

Comments?

Is it wise to have a cut off for where "bulk" applies (according to tribune the "elite") and no price increase applies?

Or does bulk mean industrial/commerce consumers?

If so how hard is it (if you are residential rich bulk consumer) to classify yourself as a company so that you dont need to fork over more money?

@ziaulislam @Norwegian @I.R.A @VCheng @The Accountant @ps3linux

 

[VCheng]

Or does bulk mean industrial/commerce consumers

Yes. Bulk industrial consumers' rates are already quite high.

 

[I.R.A]

Or does bulk mean industrial/commerce consumers?

industrial plus it can be a diplomatic mission, a housing society like Bahria too.

The government has already agreed with the IMF to increase prices of gas and electricity.

I can only say Subhan ALLAH at lack of vision of this government, I understand that they have to make the difficult decisions and take difficult steps but they are doing it all wrong. It's going to come bite them. Pervez Musharaf too relied on social media promises and was left trying to fly out again. Steps taken directly targeting the domestic consumer are like deliberately gathering support for Bilawal and Marium.

Out of the total gas theft

e.g. this one, how can a domestic consumer manage to steal gas, electricity yes but gas?

 

[The Accountant]

https://tribune.com.pk/story/1995493/2-gas-consumers-face-200-price-hike/

Gas consumers to face up to 200% price hike
By Zafar Bhutta
Published: June 19, 2019
TWEET EMAIL

PHOTO: FILE

ISLAMABAD: Domestic consumers are set to face up to 200% hike in gas prices from July 1, mainly due to the rupee depreciation against the dollar. However, the Petroleum Division has proposed no increase in gas prices for the elite who use gas in bulk.

The Economic Coordination Committee (ECC), scheduled to meet on Wednesday (today), is likely to approve the proposed hike in gas tariff, an official said. The Pakistan Tehreek-e-Insaf (PTI) government has already increased gas prices by up to 143% during the ongoing financial year.

The Petroleum Division has proposed 25% increase in gas prices for domestic gas consumer in the first slab. Fifty per cent (50%) increase is recommended for the second slab, 75% for the third slab, 100% for the fourth slab, 150% for the fifth slab and 200% for the sixth slab gas consumers.

However, no increase has been proposed for the bulk gas consumers.


With the proposed increase in gas prices, the bill for consumers falling in the first slab will go up from existing Rs285 to Rs422 per month. Bill for slab-two consumer will go up from Rs572 to Rs1,219; bill for slab-three from Rs2,305 to Rs4,009; bill for slab-four from Rs3,589 to Rs7,995 and bill for slab-five from Rs13,508 to Rs14,373 per month.

The Oil and Gas Regulatory Authority (Ogra) had recommend 31% and 20% across the board increase respectively in gas prices for all categories of the Sui Northern Gas Pipeline Limited (SNGPL) and the Sui Southern Gas Company (SSGC) consumers.

The main reason for increase in gas prices is said to be depreciation of rupee against dollar. Ogra had set Rs150 per US dollar exchange rate to determine prices of gas for consumers in the next financial year.

The SNGPL had demanded 144% average increase in gas prices. However, Ogra allowed 46% average hike for its consumers. The SSGC had demanded 30% increase in gas prices. But the regulator allowed 28% average price increase for the next financial year.

Ogra had recommended 18% increase in gas price for slab-one consumers, 29% for slab-two, 32% for slab-three, 12% for slab-four, and 4% for both slab-5 and slab-six consumers.

Experts say Ogra allowed increase in gas prices to enable the government avail the International Monetary Fund (IMF) bailout package. The government has already agreed with the IMF to increase prices of gas and electricity.

The SNGPL had estimated its revenue requirement to be Rs1223.7 billion that included Rs309.5 billion for ongoing financial year and Rs165.12 billion shortfall for previous year’s adjustment.

The regulator allowed total revenue of Rs293.3 billion including Rs264.58 billion for the next fiscal year and Rs28.7 billion revenue for previous years’ adjustments. The gas utility has been allowed to recover this revenue shortfall from the gas consumers by increasing prices of gas by 47%.

No oil, gas reserves found off Pakistan shore

The regulator has also allowed the SNGPL to build 8,000 kilometers distribution network with an initial cost of Rs5.3 billion. It also allowed Rs1.12 billion to recover from the gas consumers for rehabilitation of system and Unaccounted for Gas (UFG) control.

The authority allowed Rs344 million for 450 industrial and 5,000 commercial gas connections. An amount of Rs3.2 billion has been allowed for 400,000 new domestic gas connections.

The regulator allowed 6.30% UFG. Out of the total gas theft amounting to 49.06 billion cubic feet per day, Ogra has put the burden of 29.2 bcfd on consumers. The total UFG has been assessed at 10.5%.

The SSGCL had projected a total revenue shortfall of Rs254.7 billion for next financial year 2019-20 and Rs24.9 billion for previous years’ adjustment.

The regulator allowed passing on Rs270.7 billion that include Rs245.8 billion for next financial years’ adjustment and Rs24.9 billion for previous years’ adjustment. The total UFG of the company has been calculated at 15.69%. The regulator allowed 6.30% from the gas consumers amounting to Rs19.2 billion.

================

Comments?

Is it wise to have a cut off for where "bulk" applies (according to tribune the "elite") and no price increase applies?

Or does bulk mean industrial/commerce consumers?

If so how hard is it (if you are residential rich bulk consumer) to classify yourself as a company so that you dont need to fork over more money?

@ziaulislam @Norwegian @I.R.A @VCheng @The Accountant @ps3linux

This is mainly to discourage use of gas in room heaters and water heaters. In normal usage for food cooking my average bill is around 300 rupees but if i use water heaters than it increases 20 times so gas rates are carefully designed to stop miss use of gas which has many industrial uses other than fuel and is available in limited quantity.

Bulk customers are industrial customers as they are into job creation.

They central idea of the government policy is

Shift from consumption based growth to export based growth.
Reduce local consumption.
Focus on job creation by incentivising local manufacturer.
Discourage imports of consumeables.

 

[I.R.A]

miss use of gas

Water heaters are misuse of gas? Buddy local industry includes people who manufacture these water heaters and gas heaters ........ at one hand you wish to promote local industry and at the other you are saying their products lead to misuse of resources.

 

[ps3linux]

https://tribune.com.pk/story/1995493/2-gas-consumers-face-200-price-hike/

Gas consumers to face up to 200% price hike
By Zafar Bhutta
Published: June 19, 2019
TWEET EMAIL

PHOTO: FILE

ISLAMABAD: Domestic consumers are set to face up to 200% hike in gas prices from July 1, mainly due to the rupee depreciation against the dollar. However, the Petroleum Division has proposed no increase in gas prices for the elite who use gas in bulk.

The Economic Coordination Committee (ECC), scheduled to meet on Wednesday (today), is likely to approve the proposed hike in gas tariff, an official said. The Pakistan Tehreek-e-Insaf (PTI) government has already increased gas prices by up to 143% during the ongoing financial year.

The Petroleum Division has proposed 25% increase in gas prices for domestic gas consumer in the first slab. Fifty per cent (50%) increase is recommended for the second slab, 75% for the third slab, 100% for the fourth slab, 150% for the fifth slab and 200% for the sixth slab gas consumers.

However, no increase has been proposed for the bulk gas consumers.


With the proposed increase in gas prices, the bill for consumers falling in the first slab will go up from existing Rs285 to Rs422 per month. Bill for slab-two consumer will go up from Rs572 to Rs1,219; bill for slab-three from Rs2,305 to Rs4,009; bill for slab-four from Rs3,589 to Rs7,995 and bill for slab-five from Rs13,508 to Rs14,373 per month.

================

Comments?

Is it wise to have a cut off for where "bulk" applies (according to tribune the "elite") and no price increase applies?

Or does bulk mean industrial/commerce consumers?

If so how hard is it (if you are residential rich bulk consumer) to classify yourself as a company so that you dont need to fork over more money?

@ziaulislam @Norwegian @I.R.A @VCheng @The Accountant @ps3linux

This is typical media B.S over 80% domestic users fall in category 1 and will have to pay extra $0.92, those falling in slab 2 will have to pay ball park $4 more per month, frankly its has no real bearing. Even the elites fall in domestic users category and they will have to cough up extra 200%.


This is what happens when you hire economist/policy makers created in western mould. In capitalist economy it is always the middle income group which gets screwed in the end.

Bulk users loosely can be defined as commercial users and no increase in prices for commercial users is a good decision. No business like to have its cost of doing business increase and tend to pass on the price to the end user thus its a wise decision because in this case the end user would have ended up paying more for consumables where gas is a raw material means jacked up fertilizer cost (fertilizer in turn has a direct impact on food prices), electricity cost where gas is a raw material, textile and a few other industries.

Tariffs for domestics/commercial users are given in the link:

https://www.sngpl.com.pk/web/page.j...2op845&cats=ct456712337&artcl=artuyh709123465

 

[The Accountant]

Water heaters are misuse of gas? Buddy local industry includes people who manufacture these water heaters and gas heaters ........ at one hand you wish to promote local industry and at the other you are saying their products lead to misuse of resources.

Yes water heaters are miss use of gas when same gas can be used for manufacturing of fertilizers.

Lets face the reality that we are energy starv country unless we change the energy mix from imported to local till that time any goodie which is high to energy consumption is a luxury item and will be taxed heavily.

Put it this way ... we have 2 sources of gas one is local and cheap and another is imported and expensive ... previously the local cheap was being sold to residential only and now government is trying to balance the mix.

The fundamental problem of our economy is we have high consumption as compared to our income.
For example our per capita income is nearly equal to bangladesh and slightly lower than india but our AVERAGE standard of living is much higher than both of the countries and thats why we have to get more and more loans...

So to make long term corrections in economy we have only 2 options .. 1 is to decrease consumption which is a short term and immediate measure and the second to increase income which requires hard work efforts and a time taking exercise ...

So in short our economy is going theough cemo therapy and we will feel the pain but if we got through this cemo and we survive we will rise up for good ...

 

[B.K.N]

Good decision

 

[I.R.A]

Yes water heaters are miss use of gas when same gas can be used for manufacturing of fertilizers.

And people are supposed to take a bath with that fertilizer?

 

[The Accountant]

And people are supposed to take a bath with that fertilizer?

No that fertilizer will be used for job creation, slash import and increase import. When the people will have job they will be able to afford expensive products just like developed countries but if they dont have job they will have to take loan or beg.

Don't you know that despite we have capacity of producing enough fertilizer but we cant due to gas shortages as we have to keep the plants closed? Don't you think that if we keep the plant running that it will create job and people will be able to purchase the items at their right prices.

Furthermore, if you are using a water heater it means you are much higher than an average Pakistani so prices are higher for you only. An average Pakistani or a poor Pakistani will still be paying 300 to 400 for cooking of whole month which is still very low as compared to the other regions ...

 

[I.R.A]

No that fertilizer will be used for job creation, slash import and increase import. When the people will have job they will be able to afford expensive products just like developed countries but if they dont have job they will have to take loan or beg.

So my taking a bath in winters is actually depriving me a job opportunity, a job after which I can buy expensive wala lux sabun, but I can't use that expensive wala lux sabun to take a bath.

Why don't you simply accept that distribution system (of any resource in Pakistan) is totally messed and this government like any other is just trying cosmetics, they are no visionaries, they are just realising "oh shit we didn't know this". As I said steps taken in isolation targeting citizens would backfire, it takes ages for a domestic consumer to get a gas connection and that too after only if he pays the under the table price. There are regions where there is no supply of gas at all.

 

[maithil]

When budget of common men starts going haywire because of increase in prices of necessary consumables, they tend to focus more on their own interests. Whoever promises slash in prices of electricity,water and Gas in next election, will win hands down.

 

[The Accountant]

So my taking a bath in winters is actually depriving me a job opportunity, a job after which I can buy expensive wala lux sabun, but I can't use that expensive wala lux sabun to take a bath.

Why don't you simply accept that distribution system (of any resource in Pakistan) is totally messed and this government like any other is just trying cosmetics, they are no visionaries, they are just realising "oh shit we didn't know this". As I said steps taken in isolation targeting citizens would backfire, it takes ages for a domestic consumer to get a gas connection and that too after only if he pays the under the table price. There are regions where there is no supply of gas at all.

No, you are slightly wrong here. You are not able to see the bigger picture here. Thr GDP formula is

GDP = Consumption + Investment + Government Expenditure + Net Export (Export - Import)

Now historically to fuel growth our economists were focused on only two lever of the economy which are in red so we were having a consumption lead growth where country was being pushed to growth by taking loan and putting more funds at the disposal of public with the assumption that it will bring investment (and more manufacturing facility) and will also push exports and ultimately economy will get stabilized but unfortunately the policy resulted in exactly reverse and to meet the high consumption demand rather tahn investing in manufacturing facilities they meet the demand through import as a result the other two components decreased further and on the other hand the loan taken on the assumption that we will pay them back from investment (FDI) and export proceeds become difficult to handle.

Now the current government is reshaping the economy by focusing on other two levers of the economy (in blue) while suppressing the other two consumption and Government Expenditure. Our economic growth is lower as we are suppressing consumption by taking out subsidize, taxing import based items and luxury items.

However, this approach is also not sustainable unless match with investment and export and that is the same reason taxation on export sector is very low and government is in negotiations with alot of countries for investment and there is almost no push in terms of past accountability on big investors like AKD, Airf Habib, Mian Mansha, Dewaan Group. For this same reason NAB chairman has to officially announed that we will be giving favors to investors ...

I request you to look at the bigger as I said earlier, we are going through a cemo a complete overhaul of our economic model and it will be painful but if pass this we will start prospering ...

Look at India and Bangladesh, they did the same in 90s and within 2 decades everyone is talking about them ...

 

[shah_123]

Aap nay ghabrana nahi hai.

 

[El Sidd]

I think they are trying to pave the way for importing gas from Qatar and Iran by artificially hiking the gas prices and thus molding public opinion about Qatari letters and Iranian drones invading the country.