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Gas tariff hike to cover losses of SNGPL, SSGC

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Economic Updates - Pak Major Financial News

ISLAMABAD - Ministry of Petroleum and Natural Resources decided to slap the consumers by directing Ogra to raise gas prices by 13. 55 per cent in a bid to cover the growing losses of gas utilities (SSGPL, SSGC) under the head of Unaccounted for Gas (UfG).

It has been learnt that the cash starved government would collect Rs35 billion including gas utilities losses worth Rs16 billion from the pockets of already hard-pressed gas consumers.

The Ministry has left no stone unturned so far only to hide accumulated losses that soared due to slack response and inefficiency of both the gas companies, sources said, adding that this heavy raise was notified after the approval of Prime Minister. Earlier, Ogra in its proposal instead of raise had proposed a decrease in the gas price of Sui Northern Gas Company Limited (SNGPL), sources said, adding that the regulatory body, instead of 13. 55 per cent raise in tariff of Sui Southern Gas Company (SSGC), had recommended 16. 18 per cent raise in tariff for its gas price in the proposal it sent to the authorities concerned for approval.

It is testimony of the fact that according to Ogra it had proposed an increase in average prescribed prices to the tune of 1. 52 per cent in case of SSGC and decrease of 2. 63 per cent in case of SNGPL. Ministry of Petroleum &Natural Resources however advised Ogra to adjust the shortfall for FY 2010-11, arising out of interim stay orders given by Lahore High Court and Sindh High Court, in Estimated Revenue Requirement of 2010-11 of both utilities. Resultantly, increase in prescribed prices for SSGC & SNGPL computed to 6. 82 per cent and 3. 2 percent, respectively. Furthermore, the respective courts in FY2011-12 also gave interim stay orders; resultantly increase in prescribed prices of SSGC and SNGPL were worked out to be 13. 5 per cent and 7. 45 per cent respectively. Accordingly, 13. 55 per cent increase in sale prices was adopted to ensure uniformity in sale price across the country.

Market sources, while sharing their serious concerns regarding the gas price hike, said that the sharp reactions coming in from various parts of the state against the gas price hike are as per expectations. They argued that there could be no justification for such a hike in the natural gas prices at a single shot in Ramazan, as the masses of country are desperately waiting for good news in terms of prices of different items and bills from the authorities concerned since long. They were of the view that if the government fails to reduce the gas price hike, then it may only give a valid reason for the people who are already fed up with the power woes, to take to the streets. This may also pave way for anarchy in the state. It would be a wise move on the part of the government if it decides to reduce the hike in the holy month of Ramazan and curb the gas mafia along with the presence of political bigwigs in gas sector to play with the masses.

Similarly, the All Pakistan CNG Association (APCNGA) which had rejected this recent raise in gas prices is of the view that the government had no valid reason to hike the price by 13. 55 per cent for all consumers. APCNGA leader Ghiyas Abdullah Parcha who had raised a clamour that the sorry financial state of the incumbent government was due to the inept response and slack policy measures of authorities concerned in this regards, have ostensibly maintained silence so far by covering all probes into the UfGs of both SNGPL and SSGC.

 We reject raise in gas price, as it is unfair to the masses. Government should not approve this rise in Ramadan. This unjustified raise has been carried out to cover the gas theft of the SNGPL & SSGC. The plan is to cover the losses of the gas companies from the pockets of the consumers , APCNGA leader says. APCNGA has also placed appeal to the Petroleum Minister Dr Asim to take action against those corrupt officers who are involved in gas theft and those who provide wrong data to the government. We were promised that the increase of gas price will be applied on all sectors and new CNG price will be 45 percent less than that of petrol but the announcement is against this promise. The CNG sector is consuming 7. 2 percent gas but its tariff has increased to Rs 571. 88 per mmBTU while the fertilizer sector is consuming 36 percent gas while tariff for this sector is still Rs 102 per mmBTU.

 

 

Courtesy: Courtesy: Nation


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