Gas utilities seek more hike in tariff

ISLAMABAD - A shocking disclosure for over-burdened masses is that the state-owned gas giants have pleaded the regulatory authority to approve massive hike in gas tariff with start of New Year.
State-owned gas utilities - Sui Northern Gas Company Limited & Sui Southern Gas Company Limited - have requested the Oil and Gas Regulatory Authority (Ogra) to approve heavy gas price increase by Rs131.98mmbtu and Rs61.45mmbtu respectively. This requested hike if gets approval of the regulator would be effective in the country with the start of New Year till June 2014. Interestingly, both gas utilities in their separate requests have also pleaded to allow collection from the gas consumers by 7 per cent on account of stolen gas (Unaccounted for Gas). The SNGPL despite getting the approval from the regulator to collect 7 percent from the consumers under head UfG will however have to face heavy loss worth around Rs6 billion, 78crore and 60lakh while the SSGCL will have to bear Rs2 billion, 36crore and 60lakh. Both gas utilities have sought increase in the gas tariff due to depreciation in the value of Pak rupees in comparison with US dollar and also on account of increase in wellhead gas price and to meet expenses as well, available copies of petitions of both gas companies disclosed.
Officials at ministry of petroleum and natural resources when contacted told that Ogra would approve increase in gas tariff over the separate applications of SNGPL and SSGCL after conducting public hearings in coming November.  As per Ogra Ordinance, Ogra will dispatch its decision of increase in gas tariff to the petroleum ministry and after that a review on cross subsidy will be made after the consultation of Prime Minister, they added.
The SNGPL while seeking increase in the prescribed gas price had sought Rs131.98mmbtu hike for all categories of gas consumers from the regulator. For first slab of domestic consumers, the gas utility has pleaded to jack up price from Rs106.14mmbtu and fix it at Rs238.12mmbtu and increase the gas price from Rs212.28mmbtu to Rs344.26mmbtu for second slab. The company has also requested to increase the gas price from Rs530.69mmbtu to Rs662.67mmbtu for gas consumers of third slab. Similarly, it has also asked to jack up the price from Rs530.69mmbtu to Rs662.67mmbtu for commercial consumers, while from Rs531.39mmbtu to Rs663.37mmbtu for special commercial consumers (Roti Tandoor) and from Rs438.14mmbtu to Rs570.12mmbtu for ice factories and for general industry.  The SNGPL has also applied the Ogra to give increase in the gas price and jack it up from Rs577.11mmbtu and set it at Rs709.09mmbtu for compressed natural gas (CNG) stations, from Rs658.60mmbtu to Rs790.58mmbtu for cement factories, from Rs102.94mmbtu to Rs234.92mmbtu for feed stock of fertilizer. And, give increase in the gas tariff of fertilizer plants over usage of gas for the purpose of power production from Rs438.14mmbtu and fix it at Rs570.12mmbtu, while increase the gas tariff from Rs438.14mmbtu and fix it at Rs570.12mmbtu for Water and Power Development Authority (WAPDA), Independent Power Producers (IPPs) and Captive Power Plants (CPPs).The SSGCL in its plea to some extent contrary to the SNGPL’s request has pleaded the regulator to maintain the gas tariff at current level for gas consumers of domestic, religious/holy places, hostels, special consumers (Roti Tandoor), Fauji Fertilizer. But, the gas utility under cross subsidy mechanism has requested to approve 14 per cent increase with Rs61.45mmbtu in the gas tariff for rest of the gas consumers of SSGCL.
The gas utility (SSGCL) has also requested the regulator to jack up gas tariff from Rs434.84mmbtu and set it at Rs496.29mmbtu for the consumers categories of commercial, ice factories, industrial, CNG stations, CPPs, cement factories, Pakistan Steel Mills (PSM), Karcahi Electric Supply Company (KESC), and IPPs.
The SNGPL in its plea has pleaded that its income during running fiscal year (FY) 2013-14 will remain at Rs235 billion, 46crore and 80lakh and its financial shortfall will stay at Rs39 billion, 69crore and 80lakh. Similarly, the SSGCL will totally earn income worth Rs158 billion, 75crore and 60lakh against the estimated expenditure of Rs172 billion, 92crore and 10 lakh while it will require Rs27crore and 80 lakh worth subsidy for Liquefied Petroleum Gas (LPG) Air Mix Projects.  In this way, the gas utility will have to face a total shortfall of Rs14 billion, 44crore and 30lakh during on going fiscal year.
Besides, the SNGPL has decided to give five lakh new gas connections to domestic consumers of its domain from January to June 2014 despite growing gas crisis in the country. And, SNGPL will require Rs4.984 billion finances for above new domestic gas connection while Ogra had already given its approval to the SNGPL to install 2.5 lakh new domestic gas connections during FY 2013-14.

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