By: Javed Iqbal

Hailey College of Banking & Finance

The Minister for Petroleum and Natural Resources, Mr. Shah Mehmood Qureshi has announced to increase the prices of gas by 31% due to which CNG’s prices have also gone up by Rs. 13 per kg (33% increase) reaching total Rs. 51 per kg. He said that the following consumers would be exempted from this increase in prices:

- Such consumers who are using gas up to 200 cubic meters. According to a survey, 45% consumers are using 1-50 cubic meters gas, 29% are 50-100 while 17% are using 100-200 cubic meters gas. So, Government is paying Rs. 35 billion subsidy by giving this exemption to 91% consumers.

- All fertilizer factories.

- Independent Power Projects to avoid increase in cost of power production and then electricity bills.

He told the reasons that the decision of increase in prices had been taken due to increase in prices of oil international market and agreements with gas companies. He has further explained that the Government is committed to pay 17% & 17.5% rate of return per annum to two state owned gas utilities companies i.e. SSGC and SNGPL respectively. Please note that Rs. 61 billion is being earned by the Government in this context.

He said that the Government had cleared arrears of Rs. 286 billion of oil marketing companies and Rs. 51 billion of different banks. In response to a question, he said that Saudi Arabia had not accepted their request to supply oil against deferred payments for two years but other suitable options would be considered in future.

So-called democratic Government has given all powers to oil and gas regulatory authority to shift burden of increase in prices on the shoulders of the innocent and poor people of Pakistan.