ISALAMABAD - The cash-starved coalition government has decided to raise the prices of gas for domestic and CNG consumers by 15per cent. Following the directions of International Financial Institutions (IFIs), to bring prices of compressed natural gas (CNG) at par with other fuels like petroleum products and liquefied petroleum gas (LPG), the government is acting on a plan to increase prices of CNG by 15 per cent on quarterly basis and subsequently eliminate the cross subsidy, a means by which the government provides a subsidy to domestic consumers by charging industrial consumers of gas at higher rates. Sources said that the government is about to announce a 15 per cent raise in the CNG price, to be effective from July 1, in a bid to fulfil the commitments made with IFIs, including the World Bank, who have already urged the government to end disparity between prices of natural gas and other fuels. Under the same plan, the price of gas for domestic consumers as well as the fertilizer sector will also be raised to end cross subsidies by ensuring a uniform tariff for all consumers, the sources said, adding that donors have said that the tariff rate structure for natural gas does not reflect the cost for servicing different customer classes as the consumption of residential customers and fertilizer production is cross-subsidised from rates charged to industrial customers and power plants. Earlier Minister for Petroleum and Natural Resources Dr Asim Hussain while talking to TheNation told that the government has decided to gradually end cross subsidies on gas. The size of the cross subsidy is estimated close to Rs40 billion and the government wants to bring the price of CNG at level with 65 per cent of petrol prices. Therefore, CNG price will increase by 15 per cent from July 1, the minister said. At present, CNG prices are equal to 50 per cent of petrol prices. The minister said that domestic consumers as well as the fertilizer sector were being cross subsidised. There will be no subsidy for gas consumers in future, he declared. However, it is testimony of the fact that the ministry of petroleum had turned down a proposal of the Planning Commission to raise the gas tariff by 15per cent on a quarterly basis, which would have an accumulative impact of 60 per cent a year to equalise gas prices with other fuels like petroleum products. To a query, the minister confirmed that the petroleum ministry had opposed a proposal by Planning Commission to raise gas tariff by 15 per cent on a quarterly basis to bring it at par with the prices of other fuels. He was of the view that it would not be possible for the consumers to afford such a hike in gas tariff. He said that the government would continue raising the tariff on a bi-annual basis. The Oil and Gas Regulatory Authority has decided to increase the gas tariff by Rs5.08 and Rs7.54 per MMBTU (million British thermal units) for consumers of the Sui Southern Gas Company and Sui Northern Gas Pipeline Limited effective from July 1. Ministry of Petroleum had tried to end subsidy last year and requested the Finance Ministry to allocate amount of subsidy from the budget but plan did not materialise. However, at present the ministry is working on a plan to just increase the gas tariff in the range of 13 to 50 per cent for various sectors including fertilizer, textile and power sector under the gas tariff rationalisation mechanism, sources revealed.