Up to 100 increase in gas price sought amid dwindling subsidies
June 16, 2020 04:36 PM
Get ready to pay more as the marketing companies are eyeing up to 100 percent increase in the basic price of gas, as the Ogra (Oil and Gas Regulatory Authority) will hear the applications on June 24 and 25 after which the government is going to determine the rates for different categories.
According to 24NewsHD TV channel, the Sui Northern wants a 100 percent hike price which will translate into Rs622 per unit (MMBtu) for the year 2020-21. The move, if approved, will cause an additional burden of Rs290 billion on the consumers.
On the other hand, the Sui Southern is pleading for a 20 percent (Rs85 per MMBtu) increase, making the people to pay an extra amount of over Rs30 billion.
With the companies pressing their case for another price hike from July 1, it is now up to Ogra and then government to decide how much expensive they want to make the utilities.
Earlier, 24NewsHD TV channel had reported that the electricity would become expensive as the federal government decided to reduce the relief provided to them through subsidy.
The move came as the government surrendered to the International Monetary Fund (IMF) as Federal Minister Hammad Azhar did not even mention the salaries and pensions of state employees as well as the minimum wages for the workers.
The budget proposals show that the subsidy amount has been slashed by Rs111 billion, meaning that the citizens will get electricity at a higher per unit price.
In this scenario, the amount allocated for the K-Electric consumers is reduced by Rs34 billion. Similarly, the subsidy reserved for the power distribution companies covering other parts of the country is slashed by Rs77 billion.
According to the budget document, the reviewed subsidy amount for the consumers other than that of the K-Electric is Rs201 billion.
The IMF has been pressing the government to further reduce the subsidy and increase the utilities’ tariff after it succeeded in ensuring liberalisation of dollar pricing mechanism, leaving it to the market to determine the exchange rate.
In his budget speech, Hammad again repeated the stance that the previous government maintained a stronger rupee artificially.
With the zero pay raise and higher electricity tariff, the people will now face more financial burden as their purchasing power has already been reduced by inflation.