ISLAMABAD: After a sharp Rs 30 hike in petrol and diesel prices, Pakistan’s Oil and Gas Regulatory Authority (Ogra) has announced a 45% hike in gas prices in the country.
The move comes amid continued efforts to revive a stalled IMF programme. The prescribed prices of natural gas for the 2022-23 fiscal year are to meet revenue requirements of the two gas utilities — SNGPL and SSGCL.
After the latest round of hikes, petrol will be priced at Rs209.86, diesel at Rs204.15, kerosene oil at Rs181.94 and light diesel at Rs178.31. Only kerosene oil’s price was hiked by less than Rs30.
The regulator has forwarded two separate determinations on revenue requirements of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) for advice on gas sales price for each category of consumers.
Under the amendments in Ogra ordinance approved by the PTI government under the International Monetary Fund (IMF) programme, the federal government is required to recommend gas price for each slab of all the categories based on its decision on subsidy and cross-subsidy among various categories but within the overall revenue target set by Ogra.
The regulator has set an average prescribed for SNGPL at Rs854.52 per million British thermal units (mmBtu), up by Rs265 per unit or 45pc higher. The company demanded 198pc (Rs1,079 per unit) increase in its prescribed price of Rs1623 per mmBtu to secure about Rs597bn a revenue but the regulator allowed annual Rs260bn revenue, showing an increase of 45pc.
On top of above increase, Ogra said the financial impact of previous years’ shortfall of Rs264.894bn, i.e. Rs720.20 per mmBtu had been referred to the federal government for an appropriate policy decision and is, therefore, not made part of instant determination. SNGPL has a gas supply network in Punjab and Khyber Pakhtunkhwa.
Likewise, Ogra determined an average prescribed price for SSGCL at Rs699.30 per mmBtu, showing an increase of 44pc or Rs308 per unit. The regulator approved SSGCL’s revenue requirement for FY2022-23 at Rs285.2bn instead of Rs287bn demanded by the company.
During public hearings, users lamented the poorly managed and inefficient gas companies, poor services, lower gas pressure and load-shedding of gas.
The managements of SSGCL and SNGPL claimed they were under pressure due to higher cost of business, expensive imports, rupee’s devaluation and prior year outstanding adjustments that were approved by the regulator as legitimate heads but could not be notified by the government and Ogra.
Source: Dawn
