Pakistan Government all set to increase gas tariff by up to 124 percent

The government is all set to increase gas tariff for all the gas consumers, excluding domestic sector, ranging from 14 to 124 per cent. Gas utilities – Sui-Northern Gas Pipelines Limited (SNGPL) and Sui-Southern Gas Company Limited (SSGCL) – have submitted the petitions with Oil and Gas Regulatory Authority (Ogra), which is expected to approve the increase in gas tariff in line with Petroleum Ministry’s directions, which will be effective from January 1, 2014 to June 30, 2014.

Official sources at the Ministry of Petroleum and Natural Resources said that Ogra would approve increase in gas tariff over the separate applications by the SNGPL and SSGCL.

As per Ogra Ordinance, Ogra will dispatch its decision of increase in gas tariff to the Petroleum Ministry and after that a review on cross subsidy will be made in consultation with the Prime Minister, sources said.

The government is not likely to increase gas tariff for domestic consumers on the systems of both the gas utilities. However, increase in tariff for other consumers is certain, sources added.

The SNGPL while seeking 124 percent increase in the prescribed gas price for all the gas consumers has sought Rs131.98 per Million British thermal Unit (mmbtu) increase for all categories of gas consumers from the regulator, reliable official sources while quoting the petitions filed by the SNGPL and SSGCL with Orga informed Business Recorder.

For the first slab of domestic consumers, the gas utility has pleaded to jack up prices from Rs 106.14 mmbtu and fix it at Rs 238.12 mmbtu and increase the gas price from Rs 212.28 mmbtu to Rs 344.26mmbtu for the second slab. The company has also requested to increase the gas price from Rs 530.69 mmbtu to Rs 662.67mmbtu for gas consumers under the third slab.

Similarly, the SNGPL has also requested the regulatory body to jack up the price from Rs 530.69 mmbtu to Rs 662.67 mmbtu for commercial consumers, while from Rs 531.39 mmbtu to Rs 663.37 mmbtu for special commercial consumers (Tandoors) and from Rs 438.14 mmbtu to Rs 570.12 mmbtu for ice factories and for general industry.

The SNGPL has also applied Ogra to give increase in the gas price and jack it up from Rs 577.11 mmbtu and set it at Rs 709.09 mmbtu for Compressed Natural Gas (CNG) stations, from Rs 658.60 mmbtu to Rs 790.58 mmbtu for cement factories, from Rs 102.94 mmbtu to Rs 234.92 mmbtu for feed stock of fertiliser units. Also sought is an increase in the gas tariff of fertiliser plants over usage of gas for the purpose of power production from Rs 438.14 mmbtu and fix it at Rs 570.12 mmbtu as well as increasing the gas tariff from Rs 438.14 mmbtu and fix it at Rs 570.12 mmbtu for Water and Power Development Authority (Wapda), Independent Power Producers (IPPs) and Captive Power Plants (CPPs). The SSGCL pleaded the regulator not to increase the gas tariff for domestic consumers, worship places, hostels, special consumers (Tandoor), Fauji Fertiliser. The gas utility under cross-subsidy mechanism has requested to approve 14 percent increase with Rs 61.45 mmbtu in the gas tariff for the rest of the gas consumers of the SSGCL.

The SSGCL has also requested the regulator to jack up gas tariff from Rs 434.84 mmbtu and set it at Rs 496.29 mmbtu for commercial consumers, ice factories, industrial, CNG stations, CPPs, cement factories, Pakistan Steel Mills (PSM), Karachi Electric Supply Company (KESC) and IPPs.

Business Recorder