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Wednesday April 17, 2024

Bloated bills in the offing as SSGC wants further increase in gas tariff

Citing estimated Rs79.63 billion revenue shortfall, SSGC urges Ogra to set average price of one mmbtu gas at Rs1740.80

By Saif Ur Rehman
March 17, 2024
A representational image showing lit burner of a gas stove. — AFP/File
A representational image showing lit burner of a gas stove. — AFP/File

Consumers should brace themselves for bloated bills amid the back-breaking inflation as the Sui Southern Gas Company (SSGC) has requested the fuel regulator — the Oil and Gas Regulatory Authority (Ogra) — to further increase gas tariff from July 2024.

The development comes just a month after the caretakers burdened the masses with gas price hike on the International Monetary Fund’s (IMF) demand.

The caretaker government had approved a 67% increase in the natural gas tariff with effect from February 1. The tariff was hiked to meet the deadline of the IMF for hiking the gas prices under structural benchmark criteria till February 15, 2024.

In its fresh plea filed with the Ogra, the SSGC requested the fuel regulator to increase in the gas price by Rs274.40 per Metric Million British Thermal Unit (mmbtu).

Citing an estimated Rs79.63 billion revenue shortfall, the SSGC urged Ogra to set average price of one mmbtu gas at Rs1740.80.

A public hearing on the petition is scheduled on March 18 in Karachi, during which the regulatory authority will determine the gas prices. The Ogra will also hear the petition in Quetta on March 20.

It is pertinent to mention here that the IMF wants the government to implement the gas review implementation biannually to reduce the circular debt.

Amid the ongoing economic crisis, the newly elected government would make a formal request to the IMF for a longer and larger size of fresh bailout package under the Extended Fund Facility (EFF) next month.

The country is expected to seek a fresh IMF bailout package of over $8 billion with the possibility of augmentation through climate finance on the occasion of upcoming spring meetings of Breton Wood Institutions, known as the IMF/World Bank, scheduled to be held in Washington, DC, from April 15 to 20.

A Pakistani delegation, led by Minister for Finance Muhammad Aurangzeb and comprising Finance Secretary Imdadullah Bosal, Secretary EAD Kazim Niaz and Governor State Bank of Pakistan Jamil Ahmed, will participate in the meetings.