Treasure Magazine

Treasure Magazine

Gas prices notified for CNG, Textile, power sectors from Sept 1, 2020

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gas

ISLAMABAD: Oil and Gas Regulatory Authority (OGRA) has notified gas price hike w.e.f September 01, 2020 wherein rates for domestic consumers have remained unchanged.

The regulator on the directive of the federal government has made a massive cut in price of gas for tandoor roti in a bid to provide relief to the consumers.

However the gas prices for several other sectors like power sector, CNG, General industries and export general industry has been increased from Sept 1, 2020.

Gas price for Fertilizer feed and fuel has been increased by just 0.7% and 0.2%, respectively which will increase cost of Urea production by Rs3/bag.  The analyst of Topline Securities believes manufacturers will pass on the impact of higher gas price to consumers.

The gas price has been increased by 6.5% for Captives, which will have a negative impact of 2-5% on earnings of Chemicals and select Cement companies (mainly LUCK).

Gas price for Zero Rated industry has been increased from Rs 786/mmbtu to Rs 852/mmbtu (+8.4%). South-based textile companies like Gul Ahmed (GATM) and Feroze Mills (FML) are the larger consumers of natural gas. This will have negative impact of 3-5% on profits of these companies.

For Steel companies like International Steel (ISL) and Amreli Steel (ASTL), this will have a slightly negative impact of 1-3% on their earnings.

For Sui Companies, this will be a slightly positive development as this will improve their overall collection.