The Sui Southern Gas Company (SSGC) has requested the Oil and Gas Regulatory Authority (OGRA) to increase the price of gas by Rs 31.56 per mmbtu for all categories of consumers with effect from July 1.
The request was made at an OGRA hearing on Tuesday presided over by the OGRA chairman.
The legal counsel for SSGC, Mirza Mahmood said that OGRA was mandated to determine the tariff under Section 7 of the OGRA 2002 Ordinance and Rule 17(2) of the Natural Gas Tariff Rule 2002.
He said that under the conditions the licence was awarded to SSGC, OGRA is required to determine the total revenue requirements of SSGC and ensure that the gas utility achieves a minimum of 17 percent return in each financial year. He said that OGRA was in continuous breach of 17 percent guaranteed rate of return which was to be given to SSGC since the UFG benchmark was introduced.
The counsel said that the benchmark of 7 percent contributed to only 2.3 percent increase in the sale price of natural gas. This increase would hike the bill from Rs 210 per month to Rs 215 per month for at least 50 percent of the domestic consumers, which was a very small cost to save the company from bankruptcy and financial collapse.