SNGPL, SSGCL seek hefty tariff hike from next fiscal year

ISLAMABAD: Struggling state-run gas utility firms have approached the regulator for hefty tariff increases to ease pressure of unaccounted for gas (UFG) losses off their balance sheets and also meet their revenue requirements from new fiscal year of 2020 , The News learnt on Monday.

In its petition sent to Oil and Gas Regulatory Authority (OGRA), the Sui Northern Gas Pipelines Company Ltd (SNGPL) has sought, in the price of gas, an average increase of Rs106.54/MMBTU to RsRs698.21/mmbtu for next fiscal year.

This is for consumers in Punjab and Khyber Pakhtunkhwa.

Besides, Sui Southern Gas Company Ltd (SSGCL) that is feeding Sindh and Balochistan has sought a huge increase of Rs722.51/mmbtu to Rs1,223.70/mmbtu.

Both the companies have filed their petitions with the OGRA, urging these price increase be made effective from July 1, 2019.

In terms of percentage, SSGCL has sought 144 percent , while the SNGPL has asked for 18 percent increase.

The OGRA would hold public hearing in SSGCL case in Karachi on April 8, while in Quetta on April 10. For SNGPL, the authority would hold public hearings in Peshawar on April 11 and in Lahore on April 15.

As the government is going for an International Monetary Fund (IMF) bailout package, so reducing the UFG losses, which are gas theft, mismanagement, and leakages, would be a major challenge. Currently losses of both the gas companies stand around Rs154 billion.

Every year, around $2 billion of gas is being stolen. And this theft is then counted in the UFG.

Earlier this March too, the government allowed these companies to increase their average prescribed gas prices by Rs120 per unit for the current fiscal year for meeting their revenue requirements. These companies’ combined revenue shortfalls is Rs75.75 billion for current fiscal.