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Ogra suggests Rs58 increase in gas prices

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has approved increase in gas tariff by Rs57.89/MMBTU for Sui Northern Gas Pipelines Limited (SNGPL), while it decreased gas price by Rs65.12 for Sui Southern Gas Company Limited (SSGCL) for the ongoing fiscal year.

However, according a new formula by the federal government, the gas price approved for SNGPL will be applicable on all gas consumers of both gas utilities of the country.

Details available with DawnNews reveal that Ogra has set gas tariff at Rs480.63 per Million British Thermal Unit (MMBTU) for SNGPL, while regulatory authority fixed gas tariff at Rs354.24 for SSGCL for current financial year.

However, consumers of the SSGCL will bear increase in gas price due to federal government’s formula in this regard.

Under the formula, gas price of SNGPL will be applicable to all gas consumers of both gas utilities of the country. And, SSGCL will deposit Gas Development Surcharge (GDS) to the federal government from its collections.

It is to note here that gas tariff for SNGPL was set at Rs422.74/MMBTU and it was fixed at Rs419.36/MMBTU for SSGCL during the outgoing fiscal year.

Rejecting SNGPL’s plea to collect 10 per cent ratio of Unaccounted for Gas (UfG) from the consumers, regulator has maintained UfG at 4.5 per cent and also imposed Rs7billion penalty on the gas utility (SNGPL) due to the company’s failure in controlling gas theft.

The regulatory authority in its decision for the current financial year has approved Rs201billion worth operating income and Rs161billion heavy operating expenditures, while Rs39.5billion operating profit for SNGPL. Also, the gas company will require Rs225billion worth revenue during the year.

According to the decision of authority for SSGCL, operating income will stand at Rs175billion and Rs140billion will be operating expenditure, while Rs35.4billion operating profit.

Ogra has also rejected SSGCL’s plea regarding collections of UfG at 7 per cent from its consumers and maintained UfG at 4.5 per cent for the whole fiscal year, while it imposed Rs13.8billion worth heavy penalty on SSGCL due to company’s failure in controlling gas theft.

Sources in oil sector said that Ogra has forwarded its decision regarding gas tariff of two state-owned gas utilities (SNGL and SSGCL) to the Ministry of Petroleum and Natural Resources under Ogra Ordinance and sought its advice about the extent of gas price hike to be passed on to the domestic and different categories of the gas consumers.

They informed that the regulator also asked the federal government to confirm if it would like to give direct subsidy or cross subsidy to any sector till November 15, so that a notification be issued.

“If petroleum ministry did not give advice pertaining gas tariff of both gas companies for ongoing fiscal year, then regulatory authority under its Ogra Ordinance will impose average gas price on all sectors,” they maintained.

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