by Abdul Rasheed Azad
ISLAMABAD: The government would set an increase in gas tariff by 18-20 percent soon after Eid-ul-Fitr.
According to officials at the petroleum ministry, during the last three years, gas tariff for any sector of the economy has not been increased as a result Sui-Northern Gas Pipelines Limited (SNGPL) and Sui-Southern Gas Company Limited (SSGCL) suffered losses up to Rs 69 billion.
“In past two-and-half-year, the SNGPL and the SSGC suffered accumulative financial losses of over Rs 69 billion due to the government’s refusal to implement Oil and Gas Regulatory Authority’s (Ogra) recommendations,” an official said. He said that the Economic co-ordination Committee of the Cabinet (ECC) and others forums have approved increase in the gas tariff which is as per the increase in inflation during past three years and the government will implement this tariff soon after the Eid.
The government is not likely to pass on full impact of the gas price increase to domestic sector but up to 20 percent increase in gas tariff for other sectors of the economy after is on the cards, sources added. At present, the domestic consumers pay Rs 106.14 per (mmbtu) on consumption of up to 100 cubic metres per month, Rs 212.28 per unit on consumption of up to 300 cubic meters per month and Rs 530.69 per unit for consuming more.
Feedstock gas price for fertiliser units on the Sui Northern Gas Pipelines Limited (SNGPL) network is Rs 123.41 per mmbtu while the gas used as fuel costs Rs 488.23 per unit. The ministry wants to raise the feedstock price to Rs 200 per mmbtu.
Gas price for all commercial consumers is Rs 636.83 per mmbtu and for ice factories it is Rs 636.83 per unit. The tariff for industrial consumers and power stations of Wapda, K-Electric, independent power producers and captive plants is Rs 488.23 per unit. The Oil and Gas Regulatory Authority (Ogra) on July 3, 2014 approved a tariff increase of Rs 58.29 per mmbtu for SNGPL and Rs 22.90 per mmbtu for SSGC for the current fiscal year.
Under the arrangement, the SNGPL was to collect Rs 37 billion from gas consumers in a year to meet its revenue requirements and the SSGC was to collect Rs 30 billion. Under Clause 8 of the Ogra ordinance, the Ministry of Petroleum is bound to issue advice to the regulator for an increase in gas tariffs. However, political considerations forced the prime minister to postpone the price rise until April.
Source: Business Recorder