SSGC, SNGPL plead Ogra for 7pc gas tariff hike

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From International Desk - Special Reports

ISLAMABAD - Pakistanis should get ready to face another jolt before Eidul Fitr as two gas utilities have hunted for an increase of up to seven per cent in gas tariffs to be passed on to consumers, it was learnt.

It was learnt that over burdened masses would bear another blow as Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) on August 9, pleaded for an increase of up to seven per cent in gas tariffs, which is likely to be passed on to consumers with effect from July 1 this year.

Sources were of the view that both gas utilities seeking hike in tariff succumbed to the regulator after the political pressure from politicians seeking immediately completion of new development schemes in their respective areas. The tariff hike will be used to expand the pipeline network to new towns and villages, for purchase of vehicles, plant and machinery and vehicle insurance, sources added.

Following a recent rise in gas prices by 13. 55 percent, this further rise would add salt to already hard-pressed economy of the general public facing high ceiling prices of commodities soaring up and up with each passing day, analysts opined, adding, that this hike would give a go ahead to further inflation in the country only to benefit politicians desperate to secure votes by giving new gas schemes in their respective electorates irrationally.

They also argued that both companies have sought the tariff increase to finance parliamentarians schemes in their respective constituencies, which is a violation of rules and that too at a time when the companies have failed to provide gas to existing consumers. According to rules, gas utilities cannot launch new schemes if they have failed to provide gas to existing consumers.

They said Ogra in its earlier decision had linked initiating work on new schemes with fresh discoveries of gas the expansion of the distribution network would also curtail gas supply to consumers, which would resultantly lead to economic distortion.

It is worth mentioning here that All Pakistan CNG Association while rejecting the expected tariff increase sought by both SSGC and SNGPL to meet development project s expenses at a time of acute shortage of gas in the country. It termed the demand unjust and unfair .

Available documents revealed that Oil and Gas Regulatory Authority (Ogra) would conduct a public hearing in connection with the review petitions filed by SNGPL and SSGC on August 22 and 23 respectively to listen to the views of stakeholders. If Ogra gives a decision in favour of gas utilities, consumers will be facing a tariff increase of over 20 per cent in six months from July to December 2011.

According to the petitions submitted by gas companies, funds generated by the tariff hike will be used to expand the pipeline network to new towns and villages, for purchase of vehicles, plant and machinery and vehicle insurance. The SNGPL has sought a tariff increase of Rs22. 48 per mmbtu (seven per cent) effective July 1 to meet a revenue shortfall of Rs13. 65 billion in financial year 2011-12.

 

 

 

Courtesy: Nation

 


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