Ogra increases gas tariff by up to Rs12.6 per unit

The fresh hike will take effect from January next year.

The Oil and Gas Regulatory Authority (Ogra) has allowed gas distributors to increase tariff by up to Rs12.64 per unit to improve their revenues and the price hike will take effect from January next year.

In its decision on Wednesday, Ogra allowed Sui Northern Gas Pipelines Limited (SNGPL) to raise tariff by Rs5.46 per million British thermal unit (mmbtu) to meet revenue shortfall of Rs8.4 billion. For Sui Southern Gas Company (SSGC), Ogra increased tariff by Rs12.64 per mmbtu to meet revenue shortfall of Rs6.25 billion. SNGPL had sought an increase of Rs15.4 per unit while SSGC demanded an increase of Rs18 per unit.

The federal government has already increased gas prices by Rs13.55 per unit for all category of consumers effective from August.

In addition to this, Ogra is processing petitions of the two gas utilities for a further increase in tariffs to generate funds for executing development schemes in constituencies of parliamentarians.

In the petitions, the SNGPL is seeking a tariff increase of Rs22.48 per mmbtu to meet a revenue shortfall of Rs13.65 billion in financial year 2011-12 while SSGC wants a price increase of Rs2.35 per mmbtu to generate Rs930 million.

Gas utilities have sought the tariff increase to finance parliamentarians’ schemes, which is a violation of rules and at a time when the companies have failed to provide gas to existing consumers. According to rules, the utilities cannot launch new schemes if they fail to provide gas to existing consumers.

Published in The Express Tribune, September 22^nd,  2011.