Ogra asks govt to increase gas tariff or gas entities may collapse

ISLAMABAD: The Oil And Gas Regulatory Authority has asked the government to increase the gas tariff to avert the collapse of gas utilities — Sui Southern and Sui Northern — sources told The News.
Owing to the increase in gas production costs, a hike in expenditures of the gas companies, raise in salaries of the employees of gas utilities and new gas development schemes, the regulator determined a rise in the gas tariff but the Nawaz government did not increase the tariff in the wake of political instability triggered by the protest politics of the PAT and PTI.
However, the Nawaz government gave the impression that it is not willing to increase the gas tariff in the supreme interests of the masses. The source said that finance ministry, however, has not paid the subsidy to the Sui Southern and Sui Northern for taking the required action on the determination of Ogra on gas tariff increase owing to which Sui Northern is purchasing the gas at higher cost and selling it to the consumers at lower cost and sustaining a loss of Rs7 billion per month. The Sui Northern has so far sustained mammoth loss of Rs45 billion. And in the new development, both the utilities have warned Ogra of their imminent collapse because of which the regulator has asked the Nawaz government to increase the gas tariff.
In a letter to ministry of petroleum and natural resources, Ogra has clearly asked for raise in gas tariff saying in case of failure, the gas utilities will collapse. In the letter it also said that if the government does not permit it to increase the gas tariff, then Ogra will itself notify the raise in gas tariff according to which gas tariff will surge by 300 percent. This will certainly infuriate the consumers so the government should under the Ogra Ordinance issue the advice for raise in gas tariff.
Ogra on July 3, 2014 approved for the ongoing financial year an increase in the gas tariff by Rs58.29 per MMBTU for Sui Northern and Rs22. 90 per MMBTU for Sui Southern under which the Sui Northern was to collect Rs37 billion from the gas consumers in 365 days to cater to its revenue requirement and the Sui Southern was to collect Rs30 billion. Under clause 8 of Ogra Ordinance, ministry of petroleum is bound to issue the advice to Ogra for the raise in gas tariff.
According to the officials, Sui Northern and Sui Southern are not getting the real cost of the gas from the consumers at existing tariff and are sustaining huge losses per month and if this practice continues then these public sector entities will collapse.