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Print Print 2023-09-15

Summary seeking up to 50pc raise in gas sale prices re-submitted

  • Interim Minister for Energy, Muhammad Ali says increase in gas rates ahead of winter was inevitable to contain the gas-sector circular debt
Published September 15, 2023

ISLAMABAD: Petroleum Division has re-submitted a summary for upto 50 percent raise in gas sale prices to the interim cabinet in-line with the demand of the International Monetary Fund (IMF), an official of Petroleum Division told Business Recorder on condition of anonymity.

“It is most likely that the interim cabinet will approve the sale price of gas for 12 categories of protected and non-protected consumers in the current month (September),” he maintained.

After the approval from cabinet, Petroleum Division would notify the category-wise consumer sale price with effect from July 1, 2023, he added.

Govt says gas prices to be revised upward

Oil and Gas Regulatory Authority (OGRA) had recommended to raise gas prices for consumers of the Sui Northern Gas Pipeline Limited (SNGPL) by 50 percent and for the Sui Southern Gas Company (SSGC) by 45 percent increase on June 3, 2023.

Pakistan Democratic Movement (PDM) government however did not increase the price of gas and was in violation of the law as under the OGRA Ordinance 2022, the federal government is bound to advise the regulatory authority on minimum charges and sale price for each category of retail consumers for notification in the official gazette within 40 days.

In a press conference on Friday, the Interim Minister for Energy, Muhammad Ali had said the increase in gas rates ahead of winter was inevitable to contain the gas-sector circular debt that was growing at the rate of Rs350 billion per year. The gas sector has already piled up a debt, including interest, of Rs2.7 trillion.

Last revision in gas tariff was held on February 13, 2023 when PDM government had approved an increase up to 113 percent in the natural gas prices to recover Rs340 billion from consumers with effect from January 1, 2023.

Sources said the IMF also called for the implementation of the weighted average cost of gas (WACOG) to fully recover RLNG prices from domestic consumers. This would involve calculating the gas price by considering both imported LNG and local gas prices, determining an average price, and setting consumer-specific prices accordingly.

The SNGPL has to recover Rs245 billion of RLNG diversion to domestic sector during the period July 2018 till Apr-2023.

The oil and gas regulator has allowed both gas companies a collection of an estimated revenue requirement (ERR) of Rs697.4 billion from gas consumers in 2023-24. The SNGPL will bear the burden of collecting Rs358.4 billion and SSGC will collect Rs339 billion.

According to OGRA’s determination, SNGPL’s average prescribed price will rise by 50 percent or Rs415.11, while SSGC’s average prescribed price will witness a 45 percent increase or Rs417.23. This surge primarily accounts for the cost of gas, which makes up over 85 percent of the determined price.

Copyright Business Recorder, 2023

Comments

Comments are closed.

Maqbool Sep 15, 2023 08:37am
Why does no government nor government servant , ever take action against Gas Losses. To cover up this theft , they just keep increasing the cost of Gas to the consumers , in full connivence of IMF .
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Rizwan Sep 15, 2023 09:49am
Absolute bullshit. This gas price increase is never going to curtail the circular debt. Bring structural reforms and hang those big industrialist who are involved in gas theft and recover losses.
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Shahid Khan Sep 15, 2023 10:18am
One thing is clear that the elite don't care about the people of Pakistan
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Adnan Aziz Sep 15, 2023 10:26am
Nice. This is the only way to bring about a decrease in the population of Pakistan. Naturally, when prices of everything increase with this speed, some would commit suicide, the others would leave the country. And the caretaker Prime Minister is soon embarking on a 2-week picnic to the USA.
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Abc Sep 15, 2023 10:45am
32,000 wala noticfication kab tak aa jaye ga pubjab ka. Sb textile mills owner increments rok kar bethy hai kay notification aye ga to lagay gay. Govt he kuch sharm kr lay issue kr day.private mills owners ko to ani nai. Jitna be profit aa jaye saal ka in ky liye kam he hota hy.mangi itni ho gai hy.in ko khud 40,50 main gozra krna pary to lagay pata.
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Tulukan Mairandi Sep 15, 2023 12:08pm
75% is more appropriate. And an extra 20% for Pakistanis and their families working overseas
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Muhammad Sep 15, 2023 03:12pm
More misery for poor people. Thankyou for making Pakistan a hell place.
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Awami Sep 15, 2023 06:45pm
Care taker Govt should increase needed prices and they will be helping nation , though nobody likes to pay more but it is needed. This Prime Minister will be thanked over years for carrying out needed price rises. Any elected Govt. will find nearly impossible to raise needed prices. The PM should visit USA as soon as possible. One needs to keep in mind practical factors, USA is nation, importing maximum Pakistani goods and services. World bank Chief and deputy CEO of IMF are both Indian Americans. IMF is last resort for nations needing urgent support. In future rising IT companies from Pakistan will be mainly working with American services and providing Tech. Exports to USA.
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Awami Sep 15, 2023 06:49pm
@Rizwan, Very wrong to abuse and accuse major industrial organizations without and evidence of proof. This disservice to nation and industry which struggles against all odds.
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