AHMAD AHMADANI
The Pakistan Muslim League-Nawaz government on Monday decided to maintain the gas price at current level for the ongoing financial year (2016-17) and issued a ‘brief’ written advice to Oil and Gas Regulatory Authority (OGRA) in this regard.
Following the orders of the prime minister regarding the gas price, the Petroleum Ministry, in a written advice to the OGRA, has advised no change in the gas price for the ongoing financial year (2016-17) by keeping the price at current level.
Interestingly, the Petroleum Ministry has still not confirmed the OGRA about the strategy under which revenue requirements of two gas utilities (SNGPL & SSGCL) for the present fiscal year would be met. “The government has not given clear advice to OGRA about the subsidy to the gas consumers after the OGRA’s decision of 36 per cent hike in gas price for the current financial year,” the informed sources told Pakistan Today.
The sources said that the government has so far not decided who would bear the burden of Rs 31 billion as no word about the subsidy by the government has been mentioned in the brief advice to OGRA. They said, ‘If the government does not award subsidy then Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) will have to approach the banks to get loans on mark up in a bid to fulfill their revenue requirements of FY 2016-17’.
On November 6, the OGRA had approved 36 per cent increase in the gas price and sent the decision to the government for necessary advice. However, no response from the government was received by the OGRA. Upon this, the authority once again wrote a letter and sought advice. And, the petroleum Ministry on Monday advised no change in gas price.
The regulatory authority in its decision approved an increase in gas price by Rs 57.89 MMBTU (Million British Thermal Unit) for the SNGPL and a decrease by Rs 65.12 MMBTU for the SSGCL. The regulator fixed gas tariff at Rs 480.63 per MMBTU for the SNGPL and at Rs 354.24 MMBTU for the SSGCL for the FY 2016-17. However, consumers of the SSGCL will bear an increase in gas price due to federal government’s formula in this regard.
The OGRA also maintained Unaccounted-for Gas (UfG) at 4.5pc and rejected SNGPL’s plea to collect 10 per cent ratio of UfG from the consumers besides imposing a penalty of Rs 7 billion on the gas utility due to its failure in controlling gas theft. The authority also approved Rs 201 billion worth operating income, Rs 161 billion heavy operating expenditures and Rs 39.5 billion operating profit for the SNGPL while the gas company will require Rs 225 billion worth revenue during the year.
Similarly, the operating income of SSGCL at Rs 175 billion and operating expenditure at Rs 140 billion, while Rs 35.4 billion as operating profit of the gas utility. The OGRA in its decision had 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 Rs 13.8 billion penalty on the SSGCL due to its failure to control gas theft.