The government’s Economic Coordination Committee (ECC) has approved up to a 335 percent increase in consumer-end gas prices. The new prices will be placed by 13 July after the federal cabinet ratifies it.
According to the details by the media, the increase in price will generate about Rs666 billion in revenue for Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL).
Gas rates for the lowest residential slab of up to 50 cubic metres will increase by 43 percent, leading to an increase of 36 percent on monthly consumer bills. Those consuming up to 400 cubic metres were currently charged at Rs1,107 per unit which would now face an increase of 335pc and their bills would jump by 346pc.
Moreover, the ECC decided that the gas rates for export and non-export sectors would now be reduced by Rs100 per unit — or million British thermal units (mmBtu) — to Rs1,350 and Rs1,550 per mmBtu, respectively, instead of Rs1,450 and Rs1,650 recommended by the petroleum division.
Read more: Restore gas supply to fulfill export orders: APTMA
Important to note that these rates would still be 58pc higher than existing rates of Rs852 and Rs1,087 per unit, respectively. Currently, the export sector, which includes the textile industry, is facing a lot of problems.
Export sector’s worry
In the textile industry’s case, gas has been suspended which is leading to losses. The All Pakistan Textile Mills Association (APTMA) has warned that the textile sector could face $1 billion in loss if gas is not supplied to the export-oriented industry.
Over 50 percent drop in the exports of textile products was feared in July on account of the suspension of the gas supply to the sector from July 1, 2022, to July 8, 2022.
The drop in output will lead to a real risk of losing orders on a permanent basis as well as loss of repeat business due to delays in the delivery of orders. As a result, Pakistan may then have to seek more loans to sustain its economy.
Read more: OGRA approves 45% hike in gas prices