Sui Northern seeks increase in gas tariff by Rs366 per mmbtu

ISLAMABAD: For the first time in the history of Pakistan, Sui Northern has asked for huge increase in gas tariff by 78 percent up to Rs811 per mmbtu from the existing tariff of Rs455 per mmbtu. This means that the Sui Northern has factually asked for raise of gas tariff by Rs356 per mmbtu.

The demand of huge raise in the gas tariff is basically the result of the government policy under which the gas tariff was artificially maintained in the last five years at lower level owing to which gas utilities had to borrow huge loans. The gas utilities are factually running into of loss of billions.

The Sui Northern has asked for the mammoth raise in gas tariff in its petition submitted with Oil and Gas Regulatory Authority (Ogra).

The LNG import, the official in Petroleum Division said, has also emerged as one of the main problems for Sui Northern owing to which its financial constraints have increased manifold. The LNG price is ring-fenced and it is not being recovered. The three RLNG power plants are using imported gas but they have not paid a single penny. The amount which needs to be paid by the top management of RLNG power plants runs into tens of billions of rupees. Similarly, Sui Southern has asked Ogra to increase its gas tariff by 23 percent on an average. The officials of the regulatory body told The News that Sui Southern has sought the raise in gas tariff by Rs109 per mmbtu which is why the gas tariff will hike to Rs455 per mmbtu.

The regulatory body has admitted the petition of both the gas companies for hearing. The new gas prices will get implemented from July 1, 2018 which means the gas prices will increase during the regime of the caretaker government.