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Govt hikes gas tariff up to 122% on IMF demand

ISLAMABAD: In an effort to raise an additional Rs310 billion from the majority of domestic and all other categories of consumers in order to secure early disbursement of the $1.2 billion tranche, the Economic Coordination Committee (ECC) of the cabinet increased natural gas prices on Monday in the range of 16 to 112.32 percent with retrospective effect beginning on January 1 for a period of six months.

In addition, the idea of protecting consumers for a period of four months—November to February—whose average monthly consumption will be below 0.9 hm3—was suggested during the ECC meeting, which was presided over by Finance Minister Ishaq Dar (90 units). Additionally, four protected consumer slabs and six non-protected consumer slabs were introduced.

Prior to the price rise, the minimum slab for residential clients was 50 units per month (0.5 hm3); under the new pricing structure, this was cut to 25 units. In order to maximize revenue from the majority of domestic users, the new price structure will penalize consumers with low usage.

In addition to the increase in gas prices, a fixed rate of Rs50 per month from covered consumers and Rs500 from non-protected consumers would be collected. According to the government, fixed-rate collection is necessary to lessen the effects of higher bills brought on by increased gas usage throughout the winter.

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