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OGRA decides up to 17% increase in gas prices

*Wants Rs 50.62 per mmbtu increase in prices for Sui Northern Gas Pipelines Limited and Rs 73.12 per mmbtu for Sui Southern Gas Company Limited

ISLAMABAD: The Oil and Gas Regulatory Authority has decided to increase the gas tariff of both state-owned gas utilities – SNGPL and SSGCL - for the fiscal year 2013-14 by 12% and 17% respectively. The summary has been dispatched to the petroleum ministry for final approval.
Sources at the petroleum ministry told Daily Times that the regulator has determined increase in gas tariff of Sui Northern Gas Pipelines Limited by Rs 50.62 per mmbtu and Rs 73.12 per mmbtu for the Sui Southern Gas Company Limited for the outgoing fiscal year 2013-14. They said that though OGRA has determined the hike in the tariff for the outgoing financial year 2013-14, the impact of colossal raise amounting to around Rs 32 billion from a total Rs 47 billion will not affect the gas consumers. They said the impact of increase in tariff will be adjusted in the share of the provinces in the Gas Development Surcharge.
The sources said that the average gas tariff of the SNGPL has been set at Rs 469 per mmbtu, while Rs 486.37 per mmbtu has been fixed for the SSGCL. The SSGCL will earn a revenue of Rs 20 billion, comprising Rs 15 billion in GDS and remaining Rs 5 billion will come through the decision of OGRA on gas tariff and Unaccounted for Gas during 2014-15. Similarly, the SNGPL will earn an amount of Rs 27 billion, comprising Rs 17 billion on account of the GDS and remaining Rs 10 billion after Ogra’s decision pertaining to gas tariff and UfG for 2014-15.
A senior official said that the ratio of UfG of both gas companies has been determined by the OGRA. The UfG of SSGCL has been set at 7% subject to decision on a stay order by the Sindh High Court, while UfG of SNGPL has been fixed at 4.5% for 2013-14. He said the decision of the authority on determination of gas tariff and setting the UfG of both gas firms for the financial year 2013-14 was to be made in November 2013 in accordance with the OGRA ordinance. He said had this decision been taken as per schedule, collection of gas tariff for the period from January 1, 2014 to June 30, 2014 from the consumers of both utilities could have been made possible.
Giving ‘sole’ reason behind undue delay by the regulatory authority in the determination of UfG of both gas companies for 2013-14, the sources said that OGRA could not take this decision due to a conflict between the petroleum ministry and the gas firms on deciding the ratio of the UfG. They said that OGRA has now sought policy guidelines from the petroleum ministry. They said that the revenue requirement of both SNGPL and the SSGCL will, however, be fulfilled from money to be deposited as share of the provinces under the head of GDS. 
The OGRA has conducted hearings on the revenue requirements of both the gas utility companies for 2014-15 and has reserved the decision, to be announced after receiving policy guidelines on the ratio of UfG from the petroleum ministry.
It is worth mentioning here that currently average gas tariff of Sui Southern Gas Company Limited stands at Rs 413.25 per mmbtu while the average tariff of Sui Northern Gas Pipelines Limited is at Rs418.48 per mmbtu.

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