ISLAMABAD: Petroleum Minister Dr Musadik Malik said on Monday the government had decided to divert Rs82 billion from the profit of Sui gas companies to protect residential consumers from increase in rates.

Speaking at a news conference, the minister said about Rs99bn was available in the profitability of gas companies for circular debt adjustment, of which Rs82bn would now be used to protect domestic consumers from the hike in gas tariff.

He said the prime minister had rejected a proposal seeking a price hike of Rs100 per million British thermal unit (mmBtu) for all categories of domestic consumers, and now the government will pay Rs 82 billion to offset the increase from the amount allocated for circular debt adjustments.

Even after paying Rs82bn to offset the gas tariff increase of domestic consumers, the remaining balance of Rs17bn was still available to adjust the circular debt of petroleum sector, Mr Malik added.

The minister said the Oil and Gas Regulatory Authority (OGRA) had recommended a price of Rs1,770 per mmBtu for domestic consumers, but the proposal was turned down by the prime minister.

`This decision directly benefits lowerincome consumers,` he said.

Currently, domestic consumers are charged Rs200 per mmBtu, a rate significantly lower than Ogra`s proposed amount.Mr Malik said the cost of natural gas had risen by around 70pc since the PDM government took over from Rs1050 per mmBtu to Rs1770 per mmBtu.

He said under the prime minister`s directives, gas prices have not been increased for domestic consumers and severalotherkey sectors.

To provide relief to domestic consumers, Prime Minister Shehbaz Sharif has rejected a proposal related to hike in gas prices, the minister said.

Musadik Malik said 64pc of gas consumers belonged to economically weaker segments, and Mr Sharif had ensured they were shielded from price hikes.

However, the gas sale price for the general industry (captive power plants) has been raised from Rs3,000 per mmBtu to Rs3,500 per mmBtu.

Gas theft The minister highlighted the government`s `success in reducing gas theft` and expressed optimism about further improvements.

Responding to challenges faced by the industrial sector in Karachi, the minister said out of 2,500 industrial units only 18 generated captive power at Rs13 per unit, while the rest purchased electricity from K-Electric at Rs60 per unit. This disparity places the latter group at a considerable disadvantage.

On overall improvement in the economy, Musadik Malik said a significant reduction in inflation, which dropped from 38pc to 4.1pc as of December, had been reported.