Ogra sets new tariff for gas utilities with 23.37pc hike

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) Friday set on the higher side a new full gas cost price for both the utilities — Sui Northern and Sui Southern — at Rs623.62--631.86 per MMBTU for all consumer categories for estimated revenue requirement of ongoing financial year 2018-19.

According to new gas tariff determination, of which a copy is available with The News, the regulator has worked out the new gas cost price of both the utilities at Rs623.62--631.86 per MMBTU from July 1, 2018 with increase of 21.76-23.37% per MMBTU if compared with current average gas sale tariff that stands at Rs512,17 per MMBTU.

And if the IMF demand of setting the average sale gas tariff on a par with full gas cost price of both the gas companies is kept in mind, then the gas tariff hike is feared to increase over Rs119 per MMBTU. However, it all depends upon the government how much it increases the gas sales tariff from July 1, 2019. The IMF is stressing the government to end every kind of subsidy to gas consumers to make the gas sector sustainable. It also wants the government to recover full cost of gas from every consumer.

The regulator has set the new prescribed gas price of Sui Northern at Rs631.86 per MMBTU for estimated revenue requirement of the gas company for 2018-19 against the demand of Rs727 per MMBTU.

The regulator has also fixed the prescribed gas price for Sui Southern at 623.62 per MMBTU against the demand seeking price at Rs671.86. The regulator has come up with new gas cost of both the state owned companies to overcome of deficit of Rs50 billion and cope up with the price gap that got increased because of Pak Rupee depreciation by over 30 percent.

Both the gas utilities filed the review petition for estimated revenue requirement for 2018-19 as the earlier regulator fixed prescribed gas price at Rs629 per MMBTU for estimated revenue requirement of Sui Northern for 2018-19 and Rs595 per MMBTU for Sui Southern.

However, gas companies did not stay complacent and filed the review petitions and to this effect Sui Northern submitted a review petition seeking Rs727 as prescribed gas price for estimated revenue requirement for 2018-19 based on shortfall of Rs146.76 per MMBTU and likewise Sui Southern sought the gas cost price at Rs671.86.

The Ogra’s senior official explained that on account of over Rs50.54 billion shortfall the companies facing and Pak Rupee depreciation, the new prescribed have been set at higher side. However, he said that for final revenue requirement of 2017-18, a shortfall of Rs96 billion has not yet been included on the directive of the government in the regulator’s current determination which was demanded by the petitioner.

The PTI government has earlier increased the gas prices by 10-143 percent to recover Rs97 billion but still there is a shortfall of Rs50.54 billion for Ogra has come up with new average prescribed gas to meet the estimated revenue requirement for 2018-19 and the government keeping in view the new gas prices determined by Ogra, needs to increase the gas price by over Rs119 per MMBTU.

But the government will take the decision from July 1, 2019 about increase in gas sale tariff also keeping in view with estimated revenue requirement of 2019-2020.

To a question, the official said the government was currently extending Rs25 billion to zero-rated (textile, carpet, surgical, sports and leather) industry till June 2019 and Rs28 billion for some domestic consumers. The tandoors are also being given subsidy to contain Roti price.