The Oil and Gas Regulatory Authority (OGRA) has just recommended that gas prices be increased for both domestic and commercial users.
OGRA is recommending an increase of 300% in gas prices for the domestic consumers with 30% increase in commercial, industrial, and power sectors.
If the recommended prices are applied, consumers will have to pay up to RS 160 billion due to the hike. The authority is forced to increase prices because of subsidy applied by the previous government which allowed consumers to get gas at extremely affordable rates.
Unfortunately, the consumers now have to pay up all the amount back through these new prices. According to official reports, the average price of gas will be increased by RS. 5 per Million British Thermal Units (MMBTU). This would mean you will have to pay RS 629 per MMBTU instead of RS 200 on average.
Gas prices increase for different slabs
The gas prices will rise according to different slabs set by the authorities. Gas usage is currently divided into 3 slabs. Here is how each slab will be charged if the new prices are approved.
- For consumers under the 1st slab of domestic usage, the gas prices will increase by 30% at RS. 314 per MMBTU.
- For consumers under the 2nd slab of domestic usage, the gas prices will increase by 300% at RS. 629.
- For consumers under the 3rd slab, the gas prices will increase by 30% at RS. 629 per MMBTU.
- For commercial consumers such as fertilizer plants, power plants, cement and other industrial consumers, gas prices will increase by 30% as a whole.
According to experts, the gas prices are likely to increase as per recommendation by OGRA because the regulatory authority has made it very clear that no changes will be accepted on the current policy.
However, there is still a little hope left. Chance are that the current caretaker government may use RS 160bn worth subsidy to hold back this price hike, but it is highly unlikely.