OGRA hikes Punjab, K-P gas tariff by 27%

ISLAMABAD:

The winter of discontent for a majority of natural gas consumers in Punjab and Khyber-Pakhtunkhwa may grow longer and hurt more from January 1. Already without gas supply in winter, the authorities are expected to hike prices by 27 per cent for consumers in Punjab.

Their counterparts in Sindh and Balochistan might, however, get some relief with a price cut.

The Oil and Gas Regulatory Authority (Ogra) has allowed the increase for Sui Northern Gas Pipeline Limited’s (SNGPL) customers in order to bridge the revenue shortfall of Rs46.7 billion for the ongoing financial year. This amount includes the Rs44.7 billion shortfall for 2014-15 that has been carried forward.



The regulatory authority has granted a hike of Rs107 per million British thermal unit (mmbtu) from the existing Rs403.14/mmbtu to Rs510.95/mmbtu. The federal government will now decide to pass on the increase to gas consumers from January 1 or not.

The gas prices were last increased in September after a gap of two and a half years owing to some political compromises. Otherwise the government is bound to revise gas prices after every six months.

While the SNGPL has accumulated ‘doubtful’ debts of Rs5.1 billion from domestic, industrial and commercial consumers, the regulator has allowed it to extract Rs2.13 billion from the consumers already paying bills. The debt status has witnessed 157% increase in the current fiscal as compared to the last financial year when it stood at Rs2.01 billion. The debt in 2013-14 was Rs1.66 billion.

The SNGPL management also sought a 7.3% rise in unaccounted for gas (UFG) but Ogra only allowed 4.5%. The regulator has deducted Rs8.37 billion from the SNGPL revenue in account of theft and losses.



The company had also requested Ogra to help recover Rs75 billion from gas consumers to lay LNG pipelines. The regulator, however, allowed spending Rs30 billion in the current fiscal.

The SNGPL was directed to approach the finance ministry to get the remaining funds out of the money collected under the head of Gas Infrastructure Development Cess (GIDC).

Gas consumers are already paying a tax for installing gas-import projects, including LNG pipelines.

Meanwhile, the gas tariff for Sui Southern Gas Company consumers may be cut by Rs25.32 per mmbtu from the next year. The average tariff of SSGC has been reduced to Rs422.24 from Rs 447.56 per mmbtu. The reason for the reduction is that the company has started receiving royalty from the JJVL plant.


Published in The Express Tribune, December 20^th, 2015.