ISLAMABAD     -    To meet revenue requirements, the state-owned gas distribution companies have approached the Oil and Gas Regulatory Authority (OGRA) to sanction them up to 31 per cent increase in prescribed gas prices with effect from July 1, 2019. In their review petitions with Ogra, both the state-owned entities of Sui Northern Gas Pipeline Limited and Sui Southern Gas Company have claimed that they are expecting a combined huge revenue shortfall of Rs93.67 billion during this financial year.

It is pertinent to mention here that in June this year the government had revised the billing mechanism for the domestic gas consumers and notified up to 190 percent increase in gas prices for domestic consumers.

In its determination for the Estimated Revenue Requirement of both the gas utilities – SNGPL and SSGC - for fiscal 2019-20, the Oil and Gas Regulatory Authority (Ogra) had claimed that the average price increase for the gas consumers will be 47 percent. In review petition, Sui Northern Gas Pipelines Limited (SNGPL) and the Sui Southern Gas Company Limited (SSGCL) have filed their petitions to the regulatory authority.

The SNGPL has sought average increase in prescribed prices of gas to Punjab and Khyber Pakhtunkhwa of Rs194.01/MMBTU to Rs818.95/mmbtu against the current price of Rs624.93/mmbtu.

Interestingly, SNGPL has also demanded in the petition that it is expecting to face revenue shortfall of Rs42.3 billion this year, while had also requested for the inclusion of the last year’s shortfall of Rs28.725 billion in the final price determination. Based on these shortfalls, the northern company has asked for increase of 31 percent increase in average prescribed prices. Sui Southern Gas Company Ltd (SSGCL) that is feeding Sindh and Balochistan has sought increase of 62.52/mmbtu to Rs799/mmbtu while the current price is Rs736.48. This demand for increase in gas price is 8.48 percent.

OGRA would hold public hearing in SSGCL case in Karachi on November 20, 2019 and in the case of SNGPL, OGRA would hold public hearing in Lahore on November 19 this month. Since Pakistan is in IMF’s bailout program so, it is a challenge for the government to cut these UFG’s down. Official source said that it was one of the pressing demands from the IMF to bring these leakages down and then eradicate it. Every year, around $2 billion of gas is being stolen. And this theft is then counted in the Unaccounted for Gas (UFG)—gas theft, mismanagement and gas leakages. But, ultimately, the helpless loyal consumers used to finance it.