Consumers who are already suffering from inflation, better get ready for another 41pc increase in gas prices from the coming financial year start that is 1st of July 2019.
The gas prices had already been increased by the government of Pakistan Tehreek-e-Insaf by up to 143pc and have revised the consumer chunks, which caused an increase in the bill prices. As controversy increased over the inflated bills, the Prime Minister later instructed the public gas utilities to reimburse the amount to 3.2million consumers.
The Pakistani rupee would likely depreciate more as the utilities have been given the green signal for calculating the gas prices on the basis of the exchange rate of Rs180 against the US dollar for determining the revenue need for the next financial year 2019-20.
For calculating the gas prices based on a higher exchange rate, the petroleum division was given permission. The economic decision-makers, in the latest meeting, have given approval for surging the consumer prices for meeting the revenue requirement of the gas utilities.
The position on revenue requirement, shortfall in the previous and upcoming year and the revenue generation of both the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) were presented in a meeting of the ECC.
It was mentioned that the expected shortfall for the 2 utilities would be Rs75billion and Rs156billion for 2018-19 and 2019-20 respectively.
It was also stated that 90pc of the revenue requirement comprises of the cost of gas, which was based on dollar and hence, the revenue calculation was made considering the exchange rate.
Based on that it was proposed that a 41pc increase in gas prices was needed for meeting the shortfall in revenue requirement of the 2 companies.
Ogra would be determining the prices for the fiscal year 2019-20 by the mid of May.
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