Gas, electricity consumers soon will face more bill shock

SNGPL seeks OGRA nod for 138pc increase in gas tariffs n Nepra imposes another Rs3.08/unit raise in October bills as fuel charges adjustments

ISLAMABAD  -  There is no respite for the already inflation-hit consumers of gas and electricity as the government is set to slap another major increase in natural gas tariffs while ex-Wapda Discos (XWDiscos) have imposed another Rs3.08 per unit raise in their October bills on account of monthly fuel charges adjustments.

The state owned Sui Northern Gas Pipeline Limited (SNGPL) has sought again the OGRA nod for Rs1715.49/MMBTU or 138 per cent increase in average prescribed gas tariffs for the Fiscal Year 2023-24.

In its petition submitted to Oil and Gas Regulatory Authority (OGRA) for review of its Estimated Revenue Requirements / Prescribed Prices for FY 2023-24, SNGPL has sought an increase of 1715.49/MMBTU in average prescribed gas prices effective from July 1, 2023. SNGPL has pleaded to increase the prescribed average gas tariff of the company from the existing 1246.49/MMBtu to Rs 2961.98/MMBtu or hike of 137.62pc for the ongoing fiscal year.

The SNGPL had filed a petition before the Authority on Octo­ber 04. 2023 and subsequent­ly amended dated November 10, 2023 and December 01. 2023 under Section 8(2) of the Oil & Gas Regulatory Authori­ty Ordinance, 2002 read with Rule 4(3) of Natural Gas Tar­iff Rules, 2002 for Review of its Estimated Revenue Require­ments / Prescribed Prices for F.Y2023-24. 

The subject petition is be­ing revised on the basis of ac­tual cost of gas and sales data for the months of July & August 2023, which has resulted in re­duction in shortfall of indige­nous gas business by Rs. 2.356 billion i.e. from Rs. 181.516 bil­lion to Rs. 179.160 billion. The revised segment wise short­fall and cost of supply of RLNG business for FY 2023-24 in­cludes Rs 179.160 billion for indigenous gas business only, and Rs427.830 billion for pre­vious years shortfall. The to­tal indigenous gas business shortfall including previous years shortfall is Rs606.990 billion while Rs 72.160 billion is RLNG cost of supply, said the petition. 

The petitioner has projected a shortfall in revenue require­ment for 2023-24 at Rs. 179.160 billion, including Rs. 697 million on account of LPG Air-mix proj­ect for the ongoing fiscal year sought an increase in its average prescribed price by Rs. 506.35/MMBtu effective 1st July,2023. The hike of Rs 506.35/MMBtu, sought by the petitioner on the account of covering the revenue shortfall of the FY2023-24, will enhance the average prescribed price to Rs 1752.83/MMB­tu. Similarly, the petitioner has also sought the inclusion of Rs 427.830 billion or Rs 1209.14/MMBtu on the account of short­fall, for the previous five fis­cal years of 2018-19, 2019-20, 2020-21, 2021-22 and 2022-23, in the average prescribed prices of gas. The petitioner informed that it has included the cost of RLNG diverted molecules to do­mestic consumers, as part of cost of gas, in the light of deci­sion of Federal Cabinet dated October 30, 2023. 

Following the inclu­sion of Rs427.830 billion or Rs1209.14/MMBtu against pre­vious years shortfall, the aggre­gate average prescribed price of sought by SNGPL will reach to Rs2961.98 /MMBtu. The short­fall has been included to com­pensate for increase in cost of gas/RLNG and other compo­nents of the petition. 

“The petitioner has estimat­ed RLNG cost of service at Rs 72.160 billion (ie. Rs. 293 07/MMBTU) for 2023-24. 

Ogra will be holding hearing on SNGPL petition on 11 De­cember and has invited com­ments from the stakeholders regarding the increase in the average prescribed gas prices.

Interestingly, unlike NEPRA which holds public hearings in its headquarters and allow stakeholders zoom access, Ogra will be holding a public hearing on the SNGPL petition in an ex­pensive hotel and as usual there no zoom access will be available for the gas consumers, media or experts. Holding public hearing in expensive hotels is not only expensive but also limits the stakeholders’ participation in the process.

In another development, the National Electric Power Reg­ulatory Authority allowed of ex-Wapda Discos (XWDiscos) to collect an additional Rs3.08 per unit from the consumers in their next bills on account of monthly fuel charges adjustments.

The Authority, after incorpo­rating several adjustments, has reviewed and assessed a Na­tional Average Uniform increase of Rs.3.0786/unit in the appli­cable tariff for XWDISCOs on ac­count of variations in the fuel charges for the month of Oc­tober 2023, said a decision re­leased here by Nepra.

In a petition submitted to Nepra, on behalf Discos, the Central Power Purchasing Agency (CPPA) had pleaded that for the month of Octo­ber, the reference fuel charges from the consumers were Rs7.8938/unit, while the ac­tual fuel cost along with previous adjustments was Rs11.4277/unit. Therefore, it should be allowed to pass the increase of Rs3.5338/unit to consumers on account of FCA for October. The CP­PA-G sought a transfer of Rs 2.9592/unit (Rs 28.325 bil­lion) on account of previous adjustments, while Re0.5746/unit on account of fuel compo­nent for the month of October.

However, according to Nepra calculations, the actual cost was Rs10.9724/unit against refer­ence fuel charges from the con­sumers of Rs7.8938/unit and therefore allowed to collect an additional Rs3.0786/unit from the electricity consumers.

CPPA-G in its request claimed net positive amount of Rs.28.324 billion as previous adjustments in the instant monthly FCA. Re­garding the adjustment of 25.4 billion for Thar Coal Board-1 (TBC-I), the Authority vide de­cision dated 19.10.2023 has re­vised the FCC of TCB-I for the period February 2023 to July 31, 2023. Pursuant thereto, CP­PA-G has claimed an amount of Rs.25.4 billion, as previous ad­justment, for the mentioned period. Regarding adjustment of Rs.3.2 billion for China hub power coal based power plant, upon inquiry CPPA-G submitted that same is on account of PPA factors and pertains to a peri­od from August 2019 to June 2023. Considering the fact that the adjustments claimed by CP­PA-G are more than four years old, therefore, the Authority di­rects CPPA-G to bring these ad­justments separately before the Authority along with complete workings and detailed justifica­tion.

The regulator has allowed the previous adjustments of Rs 25.092 billion instead of the de­manded Rs 28.324 billion.

The Authority observed that during October 2023, the Sys­tem Operator had curtailed the drawl of energy from effi­cient power plants due to Sys­tem Constraints (Operation of expensive plants to avoid over­loading on Lahore Sheikhupu­ra grids, SSKT-GHKR transmis­sion line and HVDC limitation) having a financial impact of Rs 10337 million.

In view of the above, the to­tal financial impact on ac­count deviation from EMO is Rs. 103.37 million, which is provisionally being with­held from the FCA claim for the month of October 2023, till the time NTDC/NPCC pro­vides complete justification to the satisfaction of the Au­thority. Since the deduction is made by the Authority due to deviation from EMO by NPCC, which is part of NTDC, there­fore, he Authority directs CP­PA-G to pass on the impact of such deduction to NTDC. The increase of Rs 3.0786/unit will burden the discos consumers with an additional Rs 38.93 billion in their electricity bills (FCA+GST) in their next bills.

The decision will be not ap­plicable to the life line and KE’s consumers and it will be billed in December bills.

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