SSGCL suffers Rs306m loss in 9 months
Interestingly, the SSGCL earned a net profit of Rs258 million in the last fiscal year (2008-09) to streamline its energy distribution mechanism in the provision of gas to several districts of Balochistan and Sindh.
The government informed the Senate earlier this month that the gas distribution company had suffered a loss of Rs306 million on one pretext or the other while the company was expecting a net profit of over two billion rupees during this period.
“Will the petroleum and natural resources ministry explain the profit earned or the loss sustained by the SSGCL during last two years?” asked Senator Muhammad Talha Mahmood on the floor of the house.
Petroleum and Natural Resources Minister Naveed Qamar in his written reply informed the Senate that circular debt was the main reason for such a huge loss to the said company in a short period of time.
The SSGCL operates under a fixed rate return regime whereby it is entitled to a 17 per cent return on its average net fixed assets, he said. These assets already have been reduced on the basis of various ‘benchmarking conditionality’, a term used in one’s assets.
The company was in loss as the financial charges and corporate taxes were being delayed by domestic consumers.
“Variation in financial charges and corporate tax burden also has a direct impact on a company’s profitability,” the minister explained.
He said that the ultimate disallowances by the Oil and Gas Regulatory Authority (Ogra) were also a sum of Rs3,251 million in the financial year 2010-11.
The legislators were informed that the loss occurred because of the extra cost of gas purchase, extra financial charges, non-provision of taxation and depreciation inside the company employees accordingly.
The company was facing liabilities of Rs2, 547 million in its tariff return to Ogra in a period of nine months, the minister said.
Ogra contributed to the SSGCL in provision of power supply to the areas where there was a pressing need to distribute power in all provinces.
The minister in his written reply disclosed that other Ogra disallowances were the national income on unutilised government of Pakistan funds of Rs167 million. The national income on employees’ benefits was Rs88 million and the human resources of benchmark stood at Rs195 million.
Published in The Express Tribune, November 25th, 2010.
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