The Ministry of Petroleum and Natural Resources has forwarded a summary to the prime minister proposing a 15 percent hike in the price of natural gas for domestic and commercial users and a massive 69 percent hike for CNG consumers.
“An increase of 69 percent has been proposed for CNG sector to bring its price at least to 65 percent of petrol … an increase of 96 percent in the feed stock price is also proposed to eliminate the subsidy,” Petroleum Minister Dr Asim Hussain said. However, he made it clear that the decision to increase the tariff would be implemented if the prime minister approved it.
Defending the decision to increase CNG holidays and the proposal of massive increase in gas tariff, Hussain said the government was forced to take these steps as the gas supply system in the largest province of the country could collapse any moment if equitable gas distribution mechanism was not put in place immediately.
“The system in Punjab is operating on 2.4bcfd and if it went down to 2.3bcfd, the whole system would collapse,” the minister said.
Justifying the proposed increase in gas tariff, the minister said all big businesses were getting gas on tariffs lower than the gas well-head prices and this factor had created hindrance for investment in the exploration and production in the oil and gas sector. He said an increase of 18.5 percent for the industrial sector, including textiles, fuel stock to fertilizer sector and hike by 36.2 percent for IPPs had also been proposed to bring the tariff of sectors equivalent to WAPDA and KESC price.
