OGRA allows SSGC to hike gas tariff by 5.4%
Aftab Ahmed
The Oil and Gas Regulatory Authority (OGRA) has allowed a 5.4 percent increase in gas prices for Sui Southern Gas Company (SSGC) consumers.
The regulator allowed a hike in the prescribed gas price while determined the estimated revenue requirement (ERR) of Sui Southern Gas Company (SSGC) for the financial year 2020-21.
The oil and gas regulator has allowed an increase to recover Rs 14,270 million shortfalls in estimated revenue requirement (ERR) for the financial year 2020-21, including prior year shortfall of Rs 50,983 million. The new prescribed price has been determined at Rs 778.59 per MMBtu.
The authority has also allowed the gas utility to increase the gas meter rent from Rs 20 per month to Rs 40 per month from domestic consumers.
The regulator suggests that ed the petition focus and make a concrete effort to reduce UFG improve internal control systems, increase efficiency, quality of service and e, and emergency response plan. The regulator furthers stressed effective cost control, reduction measures to remain financially viable instead of passing the costs associated with its own inefficiencies, malpractices, thefts, bad de, and the consumers.
The petitioner said RERR for the year is reflecting a surplus of Rs 22,745 million. However, after inclusion of prior Rs. 50,983 million shortfall for prior years up to FY 2017-18, resulted in shortfall of Rs.28,242 million or Rs. 78.95 per MMBTU for indigenous gas business.
The petitioner briefly explained the reasons for its claims, including T&D expenses. It requested the Authority for upfront adjustment of HR cost and other expenses for its recoveryDuringng the heart; the interveners highlighted RERR limiting to the extent of actual changes in wellhead gas prices/cost of gas.
They highlighted dollar prices of crude oil and HSFO are volatile. Therefore, they called for checking petitioner’s estimates. Moreover, SSGC had taken dollar parity and observed appreciation in Pak Rupee parity against US$.
Textile is one of the largest gas consumer groups with record earnings of foreign exchange for the country showing a 20% increase in exports. They said the possible increase in the cost of gas should affect and reduce textile sector exports. The textile sector vehemently opposed cross-subsidy since it affects its competitiveness in the international market.
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The textile sector further requested to pass on the impact of the reduction in world oil prices to the industry as per the set formula; otherwise, it will have a devastating effect on Pakistan’s economy. It demanded to ask gas companies to cut their rate of return from 17.5 to 15 percent.
