Karachi: The government has decided to increase gas prices by 14% for all sectors under Petroleum Levy (PL) on Liquefied Petroleum Gas (LPG) and Gas Infrastructure Development Surcharge (GIDS) for fertiliser, industrial, commercial and domestic consumers with effect from January 1, 2012.
According to Alfalah Securities Limited, the PL of PkR12-14 per kg would be imposed on LPG while for fertiliser sector gas tariff would increase by PkKR 197 per mmbtu. Similarly, the industrial sector would be charged with PKR 13 per mmbtu, Karachi Electricity Supply Company (KESC) PKR 27 per mmbtu and Independent Power Plants (IPPs) would be liable to pay PkR70 per mmbtu on gas consumption. Likewise, the government would impose a PL of PKR 5 per kg on CNG filling stations.
The Feedstock gas prices for fertiliser sector would touch PKR 300 per mmbtu post imposition of GIDS, which is around PKR 103 per mmbtu at present. The imposition of new tax would be inflationary for the market as the fertilizer and other industries would pass on the price hike to end consumers, where increase in urea prices would have a direct impact on food inflation.