ISLAMABAD: Pakistanis are bracing themselves for a whopping 30% increase in gas prices as the government mulls yet another hike to bail out state-run firms from the crippling burden of subsidies.
Official sources said here yesterday that the Oil and Gas Regulatory Authority has recommended a raise of 30% in the current gas tariffs effective July 1, which also marks the beginning of Pakistan's new fiscal year, 2008-09.
OGRA, in its separate determinations for the state-owned gas companies, Sui Southern Gas Company and Sui Northern Gas Pipelines Limited, has prescribed the price increase of 31% and 28%, respectively.
The final decision, however, lies with the government that is most likely to decide on a 30% increase in the cabinet's special meeting on June 11, the day of budget presentation to the National Assembly.
"Increase in the prices is determined at 31% in the case of domestic tariff to keep it uniform with SNGPL and at 28% in remaining categories of consumers except feed-stock gas supply to the fertilizer consumer, who is governed by separate government policy," reads the OGRA decision on SSGC petition for increase in prices.
"Increase of 28% (Rs58.97 per MMBTU) in the petitioner's average prescribed prices has been adjusted in all categories of consumers excluding fertilizer-feed, " the OGRA stated in its decision on the provisional prescribed tariff for the SNGPL.
The prescribed prices for various categories of retail consumers determined by the Authority on provisional basis shall be subject to adjustment upon receipt of Federal Government advice under Section 8(3) of the Ordinance, with respect to the sale price of gas for each category of retail consumers provided that the overall increase in the average prescribed price remains unchanged so that the petitioner is able to achieve its total revenue requirements in accordance with Section 8(6)(f) of the Ordinance, it added.
While determining the increase in prices for the two companies, the OGRA has directed them to ensure prudence and ring fencing of all capital and revenue expenditures, including all cost allocations with respect to each Air-Mix LPG, CNG or LNG based pipeline distribution projects.
Contrary to the market based principles of the government towards liberalising the Oil and Gas sector, the two state-owned utilities have continued to enjoy fixed rate of return above 17% per annum irrespective of their efficiency and business prudence.
Similarly, frequent directions by the OGRA regarding the unaccounted for gas (UFG) have been hardly bothered about the two companies. Consequently, UFG rate has gone beyond 7% rising from the previous level of 6.5%. - Internews
Official sources said here yesterday that the Oil and Gas Regulatory Authority has recommended a raise of 30% in the current gas tariffs effective July 1, which also marks the beginning of Pakistan's new fiscal year, 2008-09.
OGRA, in its separate determinations for the state-owned gas companies, Sui Southern Gas Company and Sui Northern Gas Pipelines Limited, has prescribed the price increase of 31% and 28%, respectively.
The final decision, however, lies with the government that is most likely to decide on a 30% increase in the cabinet's special meeting on June 11, the day of budget presentation to the National Assembly.
"Increase in the prices is determined at 31% in the case of domestic tariff to keep it uniform with SNGPL and at 28% in remaining categories of consumers except feed-stock gas supply to the fertilizer consumer, who is governed by separate government policy," reads the OGRA decision on SSGC petition for increase in prices.
"Increase of 28% (Rs58.97 per MMBTU) in the petitioner's average prescribed prices has been adjusted in all categories of consumers excluding fertilizer-feed, " the OGRA stated in its decision on the provisional prescribed tariff for the SNGPL.
The prescribed prices for various categories of retail consumers determined by the Authority on provisional basis shall be subject to adjustment upon receipt of Federal Government advice under Section 8(3) of the Ordinance, with respect to the sale price of gas for each category of retail consumers provided that the overall increase in the average prescribed price remains unchanged so that the petitioner is able to achieve its total revenue requirements in accordance with Section 8(6)(f) of the Ordinance, it added.
While determining the increase in prices for the two companies, the OGRA has directed them to ensure prudence and ring fencing of all capital and revenue expenditures, including all cost allocations with respect to each Air-Mix LPG, CNG or LNG based pipeline distribution projects.
Contrary to the market based principles of the government towards liberalising the Oil and Gas sector, the two state-owned utilities have continued to enjoy fixed rate of return above 17% per annum irrespective of their efficiency and business prudence.
Similarly, frequent directions by the OGRA regarding the unaccounted for gas (UFG) have been hardly bothered about the two companies. Consequently, UFG rate has gone beyond 7% rising from the previous level of 6.5%. - Internews
