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October 27, 2020

Gas tariffs up for industries

Top Story

October 27, 2020

ISLAMABAD: The government has increased the gas tariff for CNG, IPPs, captive power plants and general industries, including export-oriented sectors. However, it kept the tariff unchanged for household consumers, commercial sector and roti tandoors. The new prices will be effective from September 1, 2020.

According to a notification by the Oil and Gas Regulatory Authority (Ogra), the gas off-take for the CNG sector has been determined at a flat rate of Rs1,283 per million British thermal units (mmbtu) against the earlier tariff of Rs1,371/mmbtu. While its minimum monthly fixed charges have been increased to Rs 46,229/month which were earlier Rs45,803.1/month.

For independent power producers (IPPs), the bulk off-take tariff has been increased to Rs857/mmbtu from earlier Rs824/mmbtu. The minimum charges have been however reduced to Rs28,898/month from Rs29,416/month.

For captive gas users, the tariff has been increased to Rs 1,087/mmbtu from earlier Rs 1,021/mmbtu. Captive plants are those which have been established by an industrial undertaking/unit to produce power for their own consumption and or sell surplus to DISCOs or bulk power consumers. Captive power plants’ minimum gas charges have been increased to Rs36,653/month from earlier Rs36,450/month.

The minimum charges are those that are levied by the gas utility if you consume gas or not, you will have to pay it. In other words, it is just like meter rent in the electricity bills or line rent of PTCL phone connection. For WAPDA and K-Electric’s power stations, the bulk tariff has been increased from Rs824 to Rs 857/mmbtu and minimum charges havebeen reduced to Rs28,898/month from earlier 29,417/month.

For all established commercial units, the tariff and minimum charges have been kept unchanged at Rs 1283/mmbtu and Rs 6,415/month respectively. The commercial units include those with local authorities or those dealing in consumer items for direct commercial sale like cafes, bakeries, milk shops, tea stalls, canteens, barber shops, laundries, hotels, malls, places of entertainment such as cinemas, clubs, theatres, and private offices, corporate firms, and ice factories.

For tandoors, the minimum monthly charges have been kept unchanged at Rs 148.5/month. The gas tariff for tandoors will also remain unchanged for first two slabs at Rs 110/mmbtu and for next two slabs at Rs 220/mmbtu and for higher slab it will be at Rs 700/unit.

For the general industrial sector that includes all consumers engaged in the processing of industrial raw material into value-added finished products irrespective of the volume of gas consumed, but excluding such industries for which a separate rate has been prescribed, the gas tariff has been increased to Rs 1054/mmbtu from earlier Rs 1021/mmbtu. However, the minimum charges have been nominally reduced to Rs 35,540/month from earlier Rs 36,499.7/month.

The government has kept unchanged the gas tariff and minimum charges unchanged. The price for zero-rated and their captive plants has been increased from Rs 786 to Rs 852 per mmbtu. The gas price for export-oriented (general industry) has been increased and export-oriented (captive) has been increased from Rs 786 to Rs 852 per mmbtu.

The government is currently giving subsidy to zero-rated industry and increase in its price would reduce the burden on the national exchequer. However, the textile industry would protest against it.

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