ISLAMABAD -  Ahmad Ahmadani -

As the PML-N-led government is set to take hold of power at the centre, Oil and Gas Regulatory Authority (Ogra) has approved gas price hike for the next financial year 2013-14, setting a test case for welfare oriented new regime how to tackle the rising inflation as a result of increase in gas prices.

Owing to gas theft worth millions of rupees, transmission losses, multi-billion-rupees so-called gas projects coupled with ever-soaring expenditures of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), both state owned gas utilities had requested the regulator (Ogra) to revise the gas prices for next fiscal year. Earlier, the SNGPL requested a hike of Rs53/mmbtu, while the SSGCL sought Rs32/mmbtu increase in the gas prices.

The Ogra, after conducting a public hearing over the requests of both gas companies, has given its decision and dispatched a copy of decision to the ministry petroleum & natural resources for consideration. The regulatory authority, instead of jacking up gas price by Rs53/mmbtu, has finally approved a hike of Rs8.72/mmbtu in the tariff of SNGPL and further decided decrease in SSGCL’s gas price by Rs12.12/mmbtu against the requested Rs32/mmbtu increase for FY 2013-14. Similarly, the regulatory authority (Ogra), while refusing to fleece the gas consumers with extra burden under various heads including LPG project requested by both gas utilities, has declined to collect hefty Rs14 billion from the gas consumers on account of stolen gas (Unaccounted for Gas). And, the regulator also declined to both gas utilities to collect heavy Rs10 billion from the consumers to meet the requirements of different heads during upcoming fiscal year. However, if the PML-N led government does not offer subsidy then this price increase will be applicable from 1st July across the country.

The regulator in its decision has set 4.5 per cent as Unaccounted for Gas (UFG) for next financial year. In this way, revenue collection target of Rs 258 billion for SNGPL and Rs178billion for SSGCL has been set for the next fiscal year. However, under the federal government’s approved formula, gas consumers of Sindh and Balochistan provinces would not enjoy the relief despite significant decrease in the tariff of SSGCL, as the tariff of SNGPL would apply on all gas consumers of the country. It has also been decided that additionally earned revenue of SSGCL would be given to the provinces of Sindh and Balochistan under the head gas development surcharge.

Sources also informed that petroleum & natural resources ministry would consult the finance ministry and would take decision either to give subsidy or to pass on heavy hike to the over burdened gas consumers. It will be a first test case for the incoming PML-N led new government that either to give a gift of relief or to drop a ‘gas bomb’ by July 1, 2013 on the over-burdened masses already bearing heavy brunt of hours-long power outages coupled with sky high inflation rate of different essential commodities especially inflated prices of daily use items for a long time, sources added.

It is worthwhile to mention that babus in federal ministries without any respite at hand to appease the over burdened masses are now leaving no stone unturned to further press them which are already very much annoyed over a tsunami of inflation, hours-long power loadshedding, high tariffs of gas and electricity coupled with inflated prices of essential commodities for a long time. Even, on Friday, the Federal Board of Revenue (FBR), while slashing the taxes on the import of cell phones, imposed heavy tax worth of Rs 250 on rate on supply to be collected from the consumers at the time of sale or activation of SIM card.