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ISLAMABAD: The Oil and Gas Regularly Authority (Ogra) allowed a raise in the gas tariff of Sui Northern Gas Pipelines Limited (SNGPL) by 35.13 percent and Sui Southern Gas Company Limited (SSGCL) by 8.57 percent for the current fiscal year 2023-24.

The revised gas tariff will be effective retrospectively from January 1- June 30. This is the second gas price hike in the current financial year.

The first hike of up to 193 percent raise in gas sale price was notified with effect from November 1, 2023.

The proposed gas tariff will cover the Rs98billion shortfall of both gas companies. The interim government had projected to collect Rs980 billion against estimated revenue requirements of Rs700 billion of both gas companies.

Ogra says no decision so far on tariff hike requests

The oil and gas regulator recommended the average increase of the prescribed gas price by 23 percent to Rs1,590 per mmbtu from the average price of Rs1,291 per mmbtu earlier determined on June 2, 2023.

The Ogra announced a 50 percent increase (Rs415.11 per mmbtu) for SNGPL, taking the gas price up to Rs1,238.68 per mmbtu, effective from July 1, 2023. It also increased the gas price by 45 percent (417.23 per mmbtu) to Rs1,350.68 per mmbtu for SSGCL.

The interim government had committed with the International Monetary Fund (IMF) to announce the raise in gas sale price till February 18, 2024, with effect from January 1, 2024.

Under the Ogra Ordinance if the government does not respond to the determination of gas within 40 days, the tariff determined by the regulator will automatically be enforced.

The prescribed price of SNGPL has been increased to Rs1,673.82 per mmbtu as compared with the price of Rs1,238.68 determined on June 2, 2023; whereas, the gas tariff of SSGC has been increased to Rs1,466.40 per mmbtu from previous Rs1,350.68 per mmbtu.

The regulator also decides to allow SNGPL a 50 percent CPI adjustment for the said year, in addition to the already placed human resource (HR) benchmark to meet genuine and rational HR cost.

The authority directed that the additional funds of Rs2,832 million on account of HR benchmark over DERR are utilised to meet the demand of CBA as well as low salary earning executive staff on priority. The HR cost is provisionally determined at Rs23,100 million including IAS cost as against Rs20,268 million allowed per DERR for the said year.

For SSGC, the regulator also allowed 50 percent CPI for the said year in the existing HR benchmark formula. The HR cost is provisionally allowed at Rs21,633 million including IAS-19 and Rs3,880 million on account of RLNG for the said year.

The authority decided to maintain its decision and fixed legal and professional charges at Rs210 million for the said year despite SNGPL’s projection that litigation against the company will raise by 22 percent. The legal cases filed from July 22 and June 23 were 27081.

For SSGC, the authority allowed Rs194 million for legal and professional charges for the said year against the SSGC’s petition that Rs376 million has been claimed due to a 100 percent increase in counsel fee owing to hyper-inflation coupled with extensive litigation in Balochistan and anticipated legal challenges relating to land acquisition.

The authority observes that the issue of liquidity crunch in the LNG/ RLNG supply chain is duly acknowledged by Petroleum Division; however, upfront amount of Rs27,500 million is not justified and has allowed 50 percent claim of Rs13,750 million subject to the actualisation at year end.

For the SSGC, the authority determined the RLNG cost of service at Rs14,680 million (Rs33.52 mmcfd or Rs31.77 per mmbtu).

Copyright Business Recorder, 2024

Comments

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Maqbool Feb 07, 2024 09:26am
SSGC & SNGPL two organizations who manage to lose ⛽️ Huge amounts of gas but no one questions them about it , but allows price increase. That’s one way of promoting inefficiently. Mubarak
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Dr fahad Feb 07, 2024 01:17pm
@Maqbool , People do theft . Ask from people
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Kashif Feb 12, 2024 08:32pm
What a shameless attitude by Pakistani govt.My gass bill is more than 45000 and I have not used geezer in whole winter even not a single day.This is totally unfair
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