SSGC, SNGPL asked to collect Rs100 bn more from consumers

ISLAMABAD: The government has officially asked the state-run gas utilities to collect a massive Rs100 billion from gas consumers for financing the project of enhancing capacity of the gas pipeline network in the country and create room for LNG transportation.

For this purpose, the Oil and Gas Regulatory Authority (Ogra) has included for the first time a new head as ‘cost of supply’ in computation of Liquefied Natural Gas (RLNG) price and worked it out at around Rs27 or $0.2638/MMBTU to be collected from gas consumers and has formally conveyed to the Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipeline Limited (SNGPL) to do so, a senior official told The News Friday. 

“Despite Ogra had been opposing the government’s move of burdening the consumers for months and wanted that the gas infrastructure development Cess (GIDC) that amounting more than 100 billion be used for this purpose, but the federal government was not in this favor as GIDC issue was not yet settled between the federal government and CNG outlets, fertilizer, cement plants, general industry and others,” sources said. 

Meanwhile, Ogra increased the price of the Liquefied Natural Gas (LNG) delivered on ex-ship (DES) basis by around 25 rupees (or $0.235) and determined LNG price at $8.4297/mmbtu for September 2016 against $8.1947 billion in August 2016 these prices are without inclusion of GST. This increase was due to inclusion of ‘cost of supply’ which in dollar terms has been notified at $0.2638/mmbtu for the month under review. 

Official said that after the inclusion of this head, gas price will also increase for cement, fertilizer, CNG, general industry and domestic consumers. In months to come, the consumers will pay it in their gas bills. 

The LNG (DES) price was $6.5782/mmbtu for September 2016 against $6.6041/mmbtu in August 2016. Despite lower price than last month, the LNG provisional price was increased. The authority has set a profit margin of 2.5 per cent (or $0.1645/mmbtu) for the Pakistan State Oil (PSO) while its other imports related actual cost has been allowed at $0.0431/mmbtu. Previous month, these charges were $0.1651/mmbtu and $0.0423/mmbtu respectively. 

The OGRA maintained terminal charges of $ 0.66/mmbtu and SSGCL margin for LSA management at 0.0250/mmbtu. Retain has been determined at 0.75 of DES price and has been worked out at $0.0493/mmbtufor September. Distribution losses have been determined at 10.23 percent of DES price which for September has been calculated at $0.6729/mmbtu. Transmission losses have been determined at 0.5 percent of DES which for the month under review is $0.329/mmbtu. 

In its decision, the OGRA noted that all the matters relating to LNG were decided at the Economic Coordination Committee (ECC) of the cabinet decision on June 14, 2016. These decisions should be ratified by the cabinet and federal government. All issues relating to RLNG should be governed under one set of laws – Ogra Ordinance.