Millions of Pakistanis woke up on Tuesday to the first shock of 'Naya Pakistan' to find out that their next month's gas bill will be hiked by up to a whopping 143 per cent to recover Rs 94 billion from the consumers, in effect slashing consumer subsidies that were a fiscal drag on the government's budget.
The decision to increase the gas prices for both household and commercial consumers was taken by the Economic Coordination Committee (ECC) of the Cabinet on Monday and announced by Minister for Petroleum Ghulam Sarwar Khan.
"The ECC allowed raise in the gas prices for domestic consumers in the range of 10 per cent for the lowest slab consumers to 143 per cent for the highest slab domestic consumers," Khan said.
The increase will be implemented in the gas bills of October and it will help the cash-starved government to recover Rs94 billion from consumers.
The decision will hurt as many as 9.4 million domestic users 3.6 million of them falling in the lowest income slab and another 2.63 million in the second lowest income group.
The gas prices for commercial and industrial consumers will increase from 30 per cent to 57 per cent that will increase the prices of fertiliser, manufacturing units, electricity generation, cement and Compressed Natural Gas.
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The minister said that the state gas companies were running in deficit and it was not possible for the government to continue with the existing price system.
Officials said that the Oil and Gas Regulatory Authority (Ogra), an independent watchdog, proposed to hike gas prices by up to 186 per cent to meet the revenue shortfall of the Sui Northern Gas Company Limited (SNGPL) and the Sui Southern Gas Company Limited (SSGCL).
Pakistan has one of the lowest prices of piped gas. At present half of the piped gas is being used by the domestic consumers on the SNGPL pipeline and 24 per cent by the SSGC consumers.
The increase was against an earlier decision of the government when information minister Fawad Chaudhry said last week that there was no plan to increase gas prices.
Opposition has lambasted the government for increasing the prices of gas.
Pakistan Muslims League-Nawaz leader Ahsan Iqbal said that the government was doing everything against its stated polices.
"Twenty jokes have become famous about this government in first 20 days," he said.
He also referred to the statement of information minister when he said that helicopter ride cost about Rs 55 per kilometer and was ridiculed on social media for his poor information.