ZAFAR BHUTTA

ISLAMABAD ( 2008-11-22 04:37:29 ) :Oil and Gas Regulatory Authority (Ogra) has rejected the demand of over 41 percent gas tariff hike, and allowed the Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) to effect no more than 7.83 percent increase in gas tariff rates effective from January 1, 2009.

The Ogra allowed the gas tariff increase of Rs 20.56 per mmbtu by 7.67 percent to SNGPL, which sought increase of Rs 112.70 per mmbtu, a 40 percent rise that was turned down. The Ogra allowed the gas tariff hike of Rs 18.55 per mmbtu to the other gas utility, SSGCL, by 7.83 percent against its demand of Rs 114 per mmbtu by 41.6 percent.

Briefing the media, Ogra member, Finance, M H Asif said that the SNGPL had estimated a total revenue of Rs 210 billion for the current financial year, however, with a shortfall of Rs 35.5 billion, the total revenue was forecast at Rs 181 billion.

He remarked that the Ogra had allowed the shortfall of Rs 6.5 billion against its estimated shortfall of Rs 35.5 billion. He said that SNGPL had sought an increase of Rs 112.70 per mmbtu gas tariff from January 1, but was allowed Rs 20.56 per mmbtu.

He noted that the SSGCL had sought an increase of Rs 114.01 per mmbtu from January 1 to meet its shortfall of Rs 22 billion, but the authority allowed Rs 18.55 mmbtu increase that was 7.83 percent against 41.6 percent gas tariff hike demand. He said the Ogra, in its decision, had allowed Rs 3.6 billion shortfall. Total revenue estimates of the SSGCL were Rs 137 billion for the current financial year, but the hike had allowed total revenue of Rs 118 billion.

Asif said that the gas utilities had filed petitions with the Ogra in October when the exchange rates and oil prices were higher, but now the oil prices had declined, which was the basis of the Ogra decision on the revised rates allowed to the two utility companies.

The Ogra rejected the gas utilities demand to compute the well-head purchase from Qadirpur Gas Field at Rs 375 per mmbtu and has taken it at Rs 161.02 per mmbtu on the basis of its notification. The said gas field was producing 500 mmcfd that was 20 percent of the total production in the country.

Well head gas was based on prices of HSFO and crude oil and projected the US dollar's exchange rate for well head gas price at 47 dollars per barrel and HSFO at 529 dollars per tonne against the gas utilities projection of 567 dollars per tonne from January 1 to July 2009. The member, Finance, said that lower benchmark for Unaccounted For Gas (UFG) was at 4.8 percent and upper benchmark at 5.5 percent.

He said that losses exceeding 5.5 percent were set off against the profit of the companies. The Ogra has advised the prescribed prices to the Federal government for its consideration and decision about sale prices of various categories of consumers will be effective from January 2009. According to the decision of the authority, the domestic consumers of SSGCL will face a gas tariff hike from Rs 6.14 per mmbtu for first slab to Rs 53.88 per mmbtu for seventh slab.

The authority allows increase of Rs 20.55 per mmbtu for commercial consumers; Rs 18.26 per mmbtu for industrial consumers; Rs 14.36 per mmbtu CNG consumers; Rs 18.26 per mmbut for captive power; Rs 33.57 per mmbtu for cement sector; Rs 18.26 per mmbtu for power sector; and Rs 19.69 per mmbtu for independent power producers (IPPs).

The authority allows the SNGPL to hike price by Rs 6.14 per mmbtu for first slab to Rs 53.88 per mmbtu for seventh slab, Rs 28.44 per mmbtu for commercial consumers; Rs 25.27 per mmbtu for general industrial consumers; Rs 29.78 per mmbtu for CNG stations; Rs 25.27 per mmbtu for captive power; Rs 76.39 per mmbtu for cement sector; Rs 25.27 per mmbtu for power stations; and Rs 19.29 per mmbtu for independent power producers (IPPs).



Copyright Business Recorder, 2008