The country’s two main gas utilities- SNGPL and SSGCL have demanded up to 220 percent inflation in the prescribed prices of gas with the effect from July 1st to meet estimated revenues requirement ERR during the fiscal year of 2021 to 2022.
In formal petitions filed with the Oil and Gas Regulatory Authority (Ogra), the Lahore-based Sui Northern Gas Pipelines Limited has demanded that its prescribed price for the next fiscal year be increased by Rs1,416 per unit defined in million British thermal units (MMBtu), including the previous year’s outstanding recovery of about Rs670 per unit.
According to an announcement by the regulator, SNGPL has demanded an additional revenue requirement of Rs367bn, including last year’s revenue shortfall of Rs254bn. For next year’s revenue shortfall, the company has sought an increase of Rs857 per unit in its prescribed price to meet next fiscal’s revenue shortfall of Rs71bn. The company has demanded another Rs137.5 per unit increase as cost of service for re-gasified liquefied natural gas (RLNG).
The existing prescribed price approved by Ogra for SNGPL, which supplies gas to Punjab and Khyber Pakhtunkhwa, stands at about Rs645 per MMBtu. Its demand if approved by the regulator would jack up prescribed prices by about 220pc to almost Rs2,160. Interestingly, the exclusive rights of SNGPL over its franchise areas of Punjab and KP have expired, but the company has projected Rs42bn for laying 11,500-kilometre distribution mainlines to connect various new towns and villages.
Regulators moves to get stakeholders ‘input on demand; it’s not immediately clear whether the rise will hit consumers.
Likewise, the Karachi-based Sui Southern Gas Company Limited has sought Rs153 per unit or 20pc increase in its prescribed price for the next fiscal year, from about Rs779 per unit to about Rs932.