IMF diktat: Govt has no option but to hike gas sale price from July 1

ISLAMABAD: Under the IMF diktat, it is no longer possible for the government to enforce the present gas sale price with a shortfall in Sui gas companies from now onward.

The government will increase the gas sale tariff under the 2022 amendment made in line with the directive of the Fund ensuring zero deficit to the Sui utilities in the preceding year.

“This means an increase in the gas sale price is imminent to address the shortfall of Rs40 billion that the Sui Northern is facing,” a senior official of the Ministry of Energy told The News.

“We are examining the determination of Ogra on prescribed gas prices for FY26. The regulator determined the hike in prescribed gas price by Rs116.96 per MMBtu for consumers of Sui Northern Pipeline Limited (SNGPL) and reduced the tariff of consumers of Sui Southern Gas Company (SSGC) by Rs103.95 per MMBtu.”

“We have to implement a uniform gas price across the country, though the Ogra has given a differential tariff for both gas utilities. We have to decide which kind of consumers should be exposed to less hike or more hike and zero hike in gas tariff.”

“To this effect, the official meetings of top functionaries of the Petroleum Division would begin today (Monday) as the government is supposed to enforce the gas sale price in 40 days after Ogra determination.”

In the determination of the regulator, Sui Southern got gains of Rs34 billion which will be used to reduce its stock of the prior years’ losses. Sui Southern is faced with prior year losses of Rs400 billion in the period of 2013-2020 because of no gas price adjustments by the past governments.

“However, the SNGPL is braving the loss of Rs40 billion in the preceding year and to cope with the said loss, the hike in gas tariff would be staggered among the consumers of the whole country.”

The official said in the days to come, it would be decided which categories would be witnessing the increase in gas sale price. However, with a hike in tariff, Sui Southern will get more advantage of Rs15 billion in the year apart from Rs34 billion gains extended in the Ogra determination.

“The prior year losses from 2013 to 2020 for Sui Northern stood at Rs900 billion including the cost of LNG diversion to the domestic sector. This is how the prior year losses of both gas utilities stand at Rs1,300 billion.”