Circular debt of gas sector soars to Rs 900 billion: Ogra to hold public hearing on SSGC petition tomorrow
ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) will hold a public hearing on Monday (tomorrow) on a petition of the Sui Southern Gas Company (SSGC) about its revenue requirement for the financial year 2022-23 of Rs184,881 million, including Rs33,787 million of un-recouped shortfall for the year 2021-22, and seeking an increase in average prescribed price by Rs667.44 per mmbtu in its prices effective from July 1, 2022 to compensate for the increase in the cost of gas and other components mentioned in the petition.
The cost of gas is linked to the international price of crude oil/ fuel oil in accordance with the agreements between the federal government and the gas producers.
According to government estimates, meanwhile, the circular debt in the gas sector has reached Rs900 billion.
The gas company is reportedly facing a severe financial crunch due to non-payment of RLNG bills by the Karachi Electric (KE) that have reached over Rs27 billion.
In a letter to the Power Division — Directorate General of Gas (Petroleum Division) — the utility has intimated that its outstanding dues against KE have piled up to an alarming level of Rs27.013 billion (excluding LPS of Rs2.645 billion) and this situation is detrimental to the sustainability of the company and may even jeopardise its financial structure.
The Sui Northern Gas Pipelines Ltd has reduced the UfG to eight per cent but the SSGC’s UfG is still at 13 per cent due to illegal gas connections in Karachi and gas thefts in Balochistan.
Copyright Business Recorder, 2022
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