ISLAMABAD - In order to fulfill one of the conditions of the International Monetary Fund (IMF), the government has approved to increase the price of gas that would further burden the masses.

The Economic Coordination Committee (ECC) of the Cabinet, which met under the chair of Adviser to Prime Minister on Finance Abdul Hafeez Shaikh on Wednesday, has given the approval to increase the gas prices.

The government has fulfilled one of the conditions of the IMF before its Executive Board meeting that would be held on July 3 to approve loan programme for Pakistan.

The ECC has approved to increase the prices of natural gas tariff for domestic consumers and on average 31pc for all other categories. According to the officials, the decision would help to generate about Rs510 billion next fiscal year.

According to the summary, the tariff for consumers using less than 50 cubic meters will remain unchanged at Rs121 per million British thermal unit (MMBTU) and its monthly bill will also remain so at Rs285.

Decision would help generate about Rs510b

The price for second slab (up to 100 cubic meters) is proposed to be increased by almost 190 percent to Rs369 per unit, from Rs127 per unit at present.

The bill of this slab is estimated to go up by Rs361 or 63pc to Rs933 per month from Rs572.

The price for third slab (up to 200 cubic meters) will witness an increase of 102pc to Rs533 per unit from Rs264 while this consumption would result in a monthly bill of Rs3,872, up by 68pc from Rs2,305 per unit.

The price for fourth slab (up to 300 cubic meters) has been proposed to be increased by Rs168pc to Rs738per unit form the existing rate of Rs275. The monthly bill of this category is estimated to go up by 122pc or Rs4,406 to Rs7,995 from Rs3,589.

The gas rate for fifth slab of 400 cubic meters will increase by about 42pc to Rs1,107 per unit from Rs780 which is precisely the average unit cost of gas supply. The bill for this category will increase by about 6.4pc to Rs14,373 per month from Rs13,508 because of the previous slab benefit.

The sixth slab price of above 400 cubic meters will be charged at Rs1,476 per unit instead of its existing rate of Rs1,460. The slab benefit will, however, reduce its monthly bill to Rs25,534 from the existing Rs31,573, down by Rs6,039 or about 19pc.

In order to promote maritime sector and strengthen the shipping industry in the country, the Committee approved the proposal of Ministry of Maritime Affairs to extend the existing tax incentives to the shipping sector from 2020-2030, subject to vetting by Law Division.

The Power Division briefed the Committee about the cash and non-cash settlement for power sector. The ECC decided that Industrial Support Package (ISP) and AJK power sector subsidy would be adjusted against the outstanding loan of government of Pakistan from power sector entity.

It also approved the proposal of Power Division to provide additional power supply for three hours to the tube-wells, domestic and commercial consumers of Balochistan province for initial period of three months. In this regard, an amount of 9 billion was approved for three months which is to be provided in three tranches.

The Committee would review the performance of QESCO on monthly basis whether the recovery drive against the power sector defaulters is producing the desired results. The ECC decided to give a deadline of three months to Power Division to resolve the issue of recovery from around thirty thousand eight tube-wells of Baluchistan.

The Committee directed Law Division to accelerate the recovery campaign against the defaulters and submit a report to ECC on monthly basis.

The Committee acceded to the proposal of Petroleum Division to allow import of Petroleum products by PSO under Saudi Fund for Development. It also reviewed various slabs of gas tariff. The ECC approved Supplementary and Technical Supplementary Grants of various Ministries/Divisions.