SNGPL, SSGCL ask for 31pc increase in gas prices

ISLAMABAD: The state-run gas distribution companies have again approached the Oil and Gas Regulatory Authority (Ogra) to approve 31 percent increase in prescribed gas prices with effect from July 1 to meet the revenue requirements, as they were expecting a combined huge revenue shortfall of Rs93.67 billion this financial year. Every year, around $2 billion worth of gas is being stolen. And this theft is then counted in the Unaccounted for Gas (UFG)—gas theft, mismanagement and gas leakages. But, ultimately, the helpless consumers have to finance it. The SNGPL and SSGCL have filed their petitions with the regulatory authority. The SNGPL has sought average increase in prescribed prices of gas to Punjab and Khyber Pakhtunkhwa of Rs194.01/MMBTU to Rs818.95/mmbtu respectively against the current price of Rs624.93/mmbtu. Interestingly, the SNGPL has also demanded in the petition that it expected a revenue shortfall of Rs42.3 billion this year, and also requested inclusion of the last year’s shortfall of Rs28.725 billion in the final price determination. Based on these shortfalls, the northern company has asked for increase of 31 percent in the average prescribed prices. The SSGCL that is feeding Sindh and Balochistan has sought increase of 62.52/mmbtu to Rs799/mmbtu, while the current price is Rs736.48. This demand for increase in gas price is 8.48 percent. The Sui Southern pleaded in its petition the demand of Rs62.52 per MMBTU based on the cost of the gas that stands at RS685.98 per MMBTU, operating cost Rs64.32 per MMBTU, staggering of financial impact Rs10.12 per MMBTU, and depreciation impact of Rs16.06 per MMBTU, and return on assets Rs20.20 per MMBTU, and subsidy for LPG air-mix projects that hovers at Rs3.28 per MMBTU and UFG adjustment that stands at Rs28.72 per MMBTU, and prior year shortfall at Rs68.75 per MMBTU. The Sui Southern is facing a deficit of Rs22.674 billion. The Ogra would hold a public hearing in the SSGCL case in Karachi on November 20. In the case of SNGPL, the Ogra would hold public hearings in Lahore on November 19. Since Pakistan is in IMF’s bailout programme, it is a challenge for the government to cut these UFG’s down. Official source said that it was one of the pressing demands from the IMF to bring these leakages down and then completely eradicate it.