SSGC seeks Rs109.78/mmbtu rise in gas prices

KARACHI: The Sui Southern Gas Company (SSGC) has proposed an increase of Rs109.78/mmbtu in gas prices to Rs789.24/mmbtu, as the gas utility is incurring a loss of Rs3.34 billion on the sale of indigenous gas and Rs16 billion loss on the sale of imported re-gasified liquefied natural gas (RLNG), making it impossible for the company to meet its revenue requirements.

Speaking at a public hearing, organised by the Oil and Gas Regulatory Authority (OGRA), SSGC managing director Imran Maniar said that there were several issues and problems in the company’s distribution network, particularly in old areas of the city.

“The unplanned earthworks damage the network and cause leakages. [The] leakage and gas theft are the primary reasons for the company’s losses. SSGC during its anti-theft campaign recovered a sum of Rs1 billion.”

Maniar said that Rs200 billion was recoverable from K-Electric and Pakistan Steel Mills, while Rs50 billion sales tax refund was also pending against the government.

The SSGC, in its petition, has sought increase in the prescribed gas price by Rs109.78/unit for estimated revenue requirements for the financial years 2021/22, mainly because of the increase in the operating cost, which has increased to Rs25.595 billion from Rs19.273 billion and the return on assets, which amounted to Rs7.704 billion.

Besides, the SSGC has estimated RLNG cost of service of Rs16.715 billion, or Rs43.38/mmbtu, in RLNG head. The gas utility is currently facing a shortfall of Rs34.994 billion. However, in the petition, the SSGC has estimated the revenue requirement for 2021/22 at Rs251.596 billion, down 9.67 per cent, compared with the revised estimated revenue requirement for the year 2020/21 at Rs278.520 billion.

The gas utility claimed unaccounted for gas (UFG) of 13 per cent against the Ogra prescribed limit of 6.5 per cent.
Ogra Chairman Masroor Khan said that there were some supply challenges, which would be overcome soon and underline the importance of energy conservancy.

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