SIFC steps in to end differences over gas price hike

Asks PBS to reconcile data, report actual price situation in next meeting

ISLAMABAD:

The Special Investment Facilitation Council (SIFC) has intervened to resolve a dispute over the actual increase in gas prices, as the national statistics agency has reported a staggering 1,100% increase, which is 10 times more than the interim government’s claim.

The dispute landed in the SIFC after the Pakistan Bureau of Statistics (PBS) and the Ministry of Energy gave varying figures two months ago.

Officials said that the SIFC in its last meeting asked both the PBS and the Ministry of Energy to end the row within two weeks, a deadline that is ending this Thursday.

The SIFC was informed that the Ministry of Energy claimed that the increase in gas prices was 100%. But the PBS put the increase at 1,100%.

The SIFC asked the chief statistician to reconcile the data and the actual price situation should be reported to the next executive committee meeting of the SIFC, said the officials.

PBS reported on Friday that gas prices for the lowest income group were higher by 1,109% during the week ended on January 11, 2024 compared to the same week a year ago.

Inflation has remained sticky and poor people are bearing the brunt. PBS said that inflation measured by the Sensitive Price Indicator skyrocketed to 44.2%.

However, it is unlikely that the PBS would be able to revise prices soon due to various administrative and technical procedures involved in the exercise.

The difference between prices quoted by the PBS and the Ministry of Energy was because of two major reasons. The interim government has slapped fixed monthly charges in the range of Rs465 to Rs2,000 per consumer and is of the view that the fixed charges should not be part of the price increase calculation.

Secondly, the Ministry of Energy is claiming that the majority of consumers were exempt from the price hike.

PBS officials said that after receiving SIFC instructions, the bureau had started reconciling the data. They said that the Ministry of Energy had shared the data of subsidised consumers of Sui Southern Gas Company (SSGC). But it has not yet shared consumer data of Sui Northern Gas Pipelines Limited.

Read Traders voice concerns over inflated gas bills

PBS officials further said that fixed charges were also part of the price increase, as they had a direct bearing on consumers.

PBS reports inflation numbers based on financial year 2015-16. Any revision would have far-reaching implications for other macroeconomic indicators.

It will need the endorsement of a technical committee and the governing council for changing the calculation methodology.

Federal and provincial governments have not been able to contain inflation and the National Price Monitoring Committee has just become a debating body.

The monitoring committee met on Tuesday to review prices and came to the conclusion that an increase of 44.2% in overall prices was “driven by perishable items including tomatoes, onions and poultry products like chicken and eggs,” said a statement issued by the planning ministry.

The planning minister “asked about the measures taken by the provincial governments and Islamabad Capital Territory to curtail the gap between wholesale and retail prices”, it added.

Representatives of the food and industries departments of Punjab, Sindh and K-P claimed that strict monitoring of prices had been ensured through heavy fines, raids and sealing of shops demanding high rates.

However, yet prices of almost every essential good are on the rise.

In its last meeting, the SIFC also took up the challenges being faced in the collection of gas bills in Balochistan and Sindh. The provincial high court had allowed the government to recover provisional gas bills to the tune of Rs5,700 per month, which created resentment among consumers.

Similarly, the Sindh High Court has given a stay order against the recent gas price hike. The SIFC has directed SSGC to file review petitions in both the provincial courts.

Despite the increase in gas prices, the gas sector circular debt has mounted to Rs3.022 trillion as of November end, adversely affecting the financial health of petroleum companies.

Published in The Express Tribune, January 17^th, 2024.

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