OGRA raises gas prices to keep consumers warm this winter



  • Passes Rs31 billion along to gas consumers as it asks govt if it will give direct subsidy or cross subsidy to any sector

The Oil and Gas Regulatory Authority (OGRA) has decided to pass Rs31 billion along to gas consumers while approving a hike for the Sui Northern Gas Pipelines Limited (SNGPL) and a cut for the Sui Southern Gas Company Limited (SSGCL) in their gas tariffs for the ongoing fiscal year.

According to sources in the Petroleum Ministry, the OGRA has approved an increase in gas price by Rs57.89/MMBTU (Million British Thermal Unit) for the SNGPL and a decrease by Rs65.12/MMBTU for the SSGCL for the ongoing financial year.

They said “the OGRA has fixed gas tariff at Rs480.63 per MMBTU for the SNGPL and at Rs354.24/MMBTU for the SSGCL. However, consumers of the SSGCL will bear an increase in gas price due to federal government’s formula in this regard”.

Under the formula, the gas price of the SNGPL will be applicable to all consumers of both gas utilities of the country. “And, the SSGCL will deposit Gas Development Surcharge (GDS) to the federal government from its collections,” a source said.

It may be mentioned here that during the outgoing fiscal year, the gas tariff for the SNGPL was set at Rs422.74/MMBTU and at Rs419.36/MMBTU for the SSGCL.

“Rejecting SNGPL’s plea to collect 10 per cent ratio of Unaccounted-for Gas (UfG) from the consumers, the regulator has maintained UfG at 4.5 per cent and also imposed a penalty of Rs7 billion on the gas utility due to its failure to control gas theft,” sources said.

They added that the regulatory authority had, in its decision for the current financial year, approved Rs201 billion worth operating income, Rs161 billion heavy operating expenditures and Rs 39.5 billion operating profit for the SNGPL. Also, the gas company will require Rs225 billion worth revenue during the year.

Telling about the decision of the authority for the SSGCL, sources said the company’s operating income would stand at Rs175 billion and operating expenditure at Rs140 billion, while Rs35.4 billion would be its operating profit.

The OGRA has also rejected SSGCL’s plea regarding collections of UfG at 7 per cent from its consumers and maintained UfG at 4.5 per cent for the whole fiscal year, while it has imposed a Rs13.8 billion penalty on the SSGCL due to its failure to control gas theft.

Sources in the oil sector said the OGRA had forwarded its decision regarding the gas tariffs of the two state-owned gas utilities to the Ministry of Petroleum and Natural Resources under the OGRA ordinance and sought its advice about the extent of gas price hike to be passed on to the domestic and other categories of gas consumers.

They said “the regulator has also asked the federal government to confirm if it will like to give direct subsidy or cross subsidy to any sector till November 15 so that a notification can be issued”.

“If the Petroleum Ministry does not give advice pertaining to gas tariff of both the gas companies for the ongoing fiscal year, the regulatory authority will impose average gas price on all sectors under the OGRA ordinance,” they added.

On the other hand, the OGRA has passed on heavy burden to gas consumers of the SNGPL for gas schemes of MPs.

According to the decision of the authority, the SNGPL has requested the authority to grant approval to pass on Rs48billion to its gas consumers for various 5500km long gas distribution schemes of members of parliament and for laying 850km long LNG pipeline.

Sharing details of OGRA’s decision, sources further revealed that the OGRA had also approved collection of Rs9billion from gas consumers of the SNGPL to complete 5500 kilometres long gas distribution schemes of members of parliament, while it also granted approval to collect Rs22billion from the consumers of the gas utility.

It may be mentioned here that the OGRA took this decision after lifting of the ban by the incumbent prime minister on new gas schemes.