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Saturday, May 18, 2024

SSGCL seeks to increase gas price by 124%

The Sui Southern Gas Company Ltd (SSGCL) has sought to increase prices by Rs392 per million British thermal unit (mmBtu) with effect from July 1 to meet its revenue default of Rs98 billion for 2023-24.

After a massive increase in consumer prices of natural gas, the company has also announced a price hike to meet its revenue shortfall. The Oil and Gas Regulatory Authority (Ogra) has also accepted the petition for a public hearing.

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Moreover, the company had estimated its total revenue requirement for the next fiscal year at Rs266 billion but its sales revenue under the existing price would yield only Rs168 billion during the year. Therefore, the revenue shortfall of Rs98 billion had to be met through an increase in the prescribed price at the rate of Rs392 per unit.

Furthermore, the company also claimed another revenue shortfall of about Rs15 billion on account of losses in the supply of Regasified Liquefied Natural Gas (RLNG) during the next fiscal year. It has demanded an additional increase of Rs32.62 per unit to meet the requirements of RLNG supplies.

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The government has already increased consumer gas prices by 124% to meet about the Rs310 billion revenue deficit of two gas companies during the current fiscal year.

Additionally, the government has to take measures to pass the impact on to various consumer categories based on OGRA-approved prices. The law requires that consumer-end gas prices be revised twice a year.

In order to implement a major prior condition set by the International Monetary Fund (IMF) for a $1.2 billion economic bailout, the Economic Coordination Committee (ECC) of the Cabinet approved a 124% hike in the tariff of gas across the board for six months — January to June.