ISLAMABAD: The government increased on Monday natural gas tariff by four to 67 per cent for different categories. It also raised tax rates on all petroleum products to allow a partial reduction in their prices for the month of September.

The increase in gas rates was one of the key requirements of the International Monetary Fund (IMF), which is expected to take up Pakistan’s case for disbursement of $506 million tranche later this month.

A senior government official told Dawn that the increase in tax rates on petroleum products would yield an additional revenue of Rs10-12bn for the government. These are highest-ever tax rates on petroleum products.

Also read: Nepra raises tariff for Karachi’s domestic consumers

Similarly, the increase in gas rates would yield Rs42bn revenue for the two gas utilities — Sui Southern Gas Company Limited and Sui Northern Gas Pipelines Limited — and over Rs7bn for the government in the shape of general sales tax.

GAS TARIFF: The price for domestic consumers using a maximum of 100 cubic metres of gas has been increased by 3.77pc to Rs110 per million British Thermal Unit (MMBTU) from Rs106; for consumers using 100-300 cubic metres by 3.77pc to Rs220 per unit from Rs212; and for consumers using over 300 cubic metres by 13pc to Rs600 per unit from Rs531.

The tariff for general industry, power and fertiliser sectors has been increased by 23pc to Rs600 per MMBTU from Rs488 and that of CNG by 16.7pc to Rs700 per unit from Rs600.

The rate for commercial consumers has been increased by 9.9pc to Rs700 per MMBTU from Rs637; for captive power plants by 4.7pc to Rs600 per unit from Rs573 per unit and for cement industry by less than one per cent to Rs750 from Rs743.

The highest increase was made for fertiliser feed stock. The tariff for old plants has been raised by 63pc to Rs200 per MMBTU and that for new plants by 66.7pc to Rs72 per unit.

The revised gas tariff will be effective from Sept 1.

OIL PRICES: Setting aside the recommendations of the Oil and Gas Regulatory Authority (Ogra) for a reduction by eight to 12pc in prices of all petroleum products, the government increased tax rates to allow only 3.6 to 5pc cut in prices. The prices of all five consumer items – petrol, high speed diesel (HSD), kerosene, light diesel oil (LDO) and high octane blending component (HOBC) have been reduced by a flat Rs3 per litre.

The new ex-depot price of petrol was set at Rs73.76, a reduction of 3.9pc, from Rs76.76 per litre. The GST rate on petrol was increased to 25.5pc from 20pc. Ogra had called for reducing petrol price by 8pc to Rs70.62.

High speed diesel will sell at Rs82.04 per litre instead of Rs85.05, down by 3.5pc. The GST was increased to 45pc from 36.5pc.

Ogra had recommended the HSD price at Rs77.45, a reduction of 9pc.

The kerosene price was reduced by 5pc to Rs57.11 per litre from Rs60.11. The GST was jacked up to 30pc from 20pc. Ogra had proposed a reduction in kerosene price by 12.14pc to Rs52.81.

The government set LDO price at Rs53.59 per litre, down by 5.3pc, from Rs56.59. The raise in GST on the commodity was 9.5pc – from 20pc to 29.5pc. Ogra had recommended its price at Rs49.79, a reduction of 12pc.

The rate for HOBC was fixed at Rs79.79 per litre, down by 3.6pc, from Rs82.79. The tax rate was raised from 17pc to 24pc. The rate recommended by Ogra was Rs75.42 – a fall of 9pc.

The price of JP-1 (aircraft fuel) was cut by 13.5pc to Rs42.65 per litre from Rs49.33. This was the only product on which the government accepted Ogra’s recommendation.

Published in Dawn, September 1st, 2015

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