SSGC seeks hike in gas price

The Oil and Gas Regulatory Authority (Ogra) held a public hearing to discuss Sui Southern Gas Company’s (SSGC’s) petition regarding review of its estimated revenue requirement for fiscal year 2021-22 on Monday.

The SSGC projected a shortfall in revenue requirement of Rs18.4 billion for fiscal year 2021-22 and sought an increase in its average prescribed price by Rs58.42 per MMBTU effective from July 01, 2021. The petitioner has also estimated cost of RLNG services at Rs30.48 per MMBTU.

The authority accepted the petition and issued notices to all stakeholders on November 23, 2021. It held a public hearing in Karachi on December 6, 2021. The aim of the meeting was to hear and provide an opportunity to all consumers, general public and stakeholders to participate and give their input on the petition.

Ogra, under section 8(2) of the Ogra Ordinance, 2002 read with Rule 4(3) of Natural Tariff Rules, 2002 held the public hearing under the Chairmanship of Masroor Khan and reserved its decision that will be passed in due course of time.

Criticising the move, Karachi Chamber of Commerce and Industry (KCCI) former president Zubair Motiwala said that it was the wrong time to increase gas prices and rejected any hike in gas rates.

He requested SSGC to come up with pragmatic ideas to deal with its revenue shortfall instead of demanding increase in gas prices.

Citing that government was encouraging industrialisation and import substitution, he questioned how industries would run the machines if gas is not available to them.

He highlighted that industries in SITE area, Karachi were deprived of gas since November 11 and held the opinion that situation in rest of the industrial zones of Karachi was either same or worse.

Motiwala said that 54% of exports were generated from Karachi and the city contributed 68% in country’s total revenue.

“Recently more than $3.5 billion have been invested on installation of new machinery in Karachi which would boost exports and generate employment opportunities,” he said.

He noted that industries and CNG stations in other provinces, that had been receiving Sindh’s share of gas, remained fully operational throughout the week while Karachi remained deprived.

The energy being consumed by the industries in Karachi was much lower compared to what was being consumed by the industries in the northern areas whose share in exports stood at 46%.

Published in The Express Tribune, December 7^th, 2021.

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