According to sources in the Ministry of Petroleum and Natural Resources, gas prices from January 1, 2012 for domestic, commercial, cement industry, Water and Power Development Authority (Wapda) and Karachi Electricity Supply Company (KESC) would be increased by 13.98 percent, and for industrial sector by 16.95 percent.

Additionally, the government has also decided to impose Gas Infrastructure Development Surcharge (GIDS) on five sectors, excluding domestic and commercial sectors.For fertilizer sector, under GIDS, gas tariff would increase by Rs 197 per million cubic meet (mmbtu), industrial sector Rs 13 per mmbtu, Karachi Electricity Supply Company (KESC) Rs 27 per mmbtu, and independent power plants (IPPs) running on gas Rs 70 per mmbtu” officials said.

Gas price for compressed natural gas (CNG) stations in zone-1 would be raised by 38.67 percent, which consists of Khyber-Pakhtunkhwa (KP), Pothohar, and entire Balochistan region, while in zone-2 which consists of parts of Punjab and entire Sindh, gas tariff for CNG sector would be increased by 27.79 percent.

Gas tariff for independent power producers would be increased by 34.57 percent and for old fertilizer units it would be increased by 207.10 percent whereas for new fertilizer plants by 1.81 percent.

After the increase in gas tariff for all sectors from January 1, 2012 tariff for domestic consumers would range between Rs 122.95 per mmbtu to Rs 1302.46 per mmbtu, commercial Rs 600.19 per mmbtu,industrial, Wapda, KESC and IPPs Rs 507 per mmbtu. For CNG sector gas tariff in zone-1 Rs 792 per mmbtu and in zone-2 Rs 730 per mmbtu. The Oil and Gas Regulatory Authority (Ogra) would issue notification of the new gas prices.The government has also decided to impose petroleum levy of Rs 5 per kg on the owners of CNG filling stations.

Petroleum ministry officials said: “If we are imposing Rs 1 gas development surcharge per mmbtu we will collect Rs 5 billion annually.”

The ministry is in the process of calculating all expected revenue generation through petroleum levy on LPG and gas development surcharge on all the users of gas, as per rough estimates amount of Rs 57 billion would be collected annually. The Gas Infrastructure Development Surcharge on CNG would increase the prices of the product in zone-1 by Rs 141 per mmbtu. The zone-1 consists of KP, Pothohar and Balochistan regions.

Sources added that the revenue generated through PL on LPG and GIDS on gas would be spent on the development on Turkmenistan-Afghanistan-Pakistan-India (TAPI), Iran-Pakistan gas pipeline projects as well as laying of Liquefied Natural Gas (LNG) pipeline project from Karachi to Lahore.

Ogra has already made capacity allocations to import 1.4 billion cubic feet per day (BCFD) of LNG to three companies and first delivery is expected by the middle of 2012.