Energy crisis: Gas prices increased for captive power plants

Rates for domestic, commercial and industrial consumers unchanged.

ISLAMABAD:

The federal government on Friday decided to keep gas prices unchanged for consumers except captive power plants with immediate effect.

Sources said that the government was proposed to increase gas prices by 2.8 per cent across the board following Oil and Gas Regulatory Authority’s (Ogra) decision. However, the government decided to keep gas prices unchanged for consumers except captive power plants, which faced 17.42 per cent increase with immediate effect. For this, the petroleum ministry on Friday sent an advice to Ogra to notify the raise in gas prices for captive power plants.

As many as 200 influential families who have captive power plants, were receiving cheaper gas at the cost of efficient power plants, which the National Accountability Bureau termed a criminal offence.

However, officials have said that the government has decided to tighten the noose around these influential groups by raising gas prices. Majority of these captive power plants were inefficient and were wasting gas, but no action had been taken against them.

Officials said that these groups were influential and powerful, and had forced the previous government to change gas priority order, changing their placement in the gas allocation policy from category four to category three.



“Now the price of gas for captive power plants has been raised from Rs488.23 to Rs573.28 per Million British Thermal Unit (mmbtu),” officials said. However, domestic, commercial and industrial consumers would continue paying the same price.

The government also wanted to raise gas prices for CNG and fertiliser, but now the plan has been put on hold till a decision is reached on Gas Infrastructure Development Cess (GIDC) in the Supreme Court. Sources maintained that the federal government had moved SC to revert the lower judiciary’s decision against its imposition so that it could restore the collection of GIDC from consumers.

Ogra has proposed a slash in the price of gas for consumers of Sui Southern Gas Company (SSGC) and a hike in prices for the consumers of Sui Northern Gas Pipeline Limited (SNGPL), effective from July 1.

According to an official, SNGPL and SSGC had originally requested Ogra to raise gas prices for consumers by Rs53 per mmbtu and Rs32 per mmbtu respectively in order to recover Rs14 billion in revenue lost on account of gas theft and to cover the Rs10 billion needed to launch different LPG projects.

The regulator, however, rejected the gas companies’ requests. After conducting public hearings and taking into account the concerns of consumers, it allowed SNGPL to raise gas prices by just Rs8.72 per mmbtu and slashed SSGC’s current gas prices by Rs12.12 per mmbtu.

Published in The Express Tribune, August 24^th, 2013.