ISLAMABAD – A recommendation has been sent by Oil and Gas RegulatoryAuthority (OGRA) to triple the price of natural gas supplied to domesticconsumers and raise rates for commercial, industrial and power sector usersby 30 percent
The ECC chaired by Finance Minister Asad Umer would deliberate upon theissue.
ECC will also delibrate on summaries about the impact of circular debt onthe energy sector, written by officials of the power and petroleumdivisions and the finance ministry. It would discuss the deterioratingfinancial health of Pakistan State Oil.
The ECC would also decide upon measures to mitigate an emerging shortage offertilisers and ensure the availability of premium di-ammonium phosphatefertiliser for the forthcoming sowing of the Kharif crop.
The gas price increase recommended in June by the OGRA had been leftunaddressed by the caretaker government. Instead of increasing the ratefrom July 1, it had left the unpopular decision to the incoming electedgovernment.
Both the major gas utilities, Sui Southern and Sui Northern, are sufferingfrom financial difficulties because the previous Pakistan MuslimLeague-Nawaz government did not increase the prices during the five yearsof its tenure.
They now want the PTI government to approve the OGRA-recommended gas pricehike, passing on extra costs totaling Rs123 billion a year to consumers, tohelp resolve their worsening internal liquidity crises.
The Managing Director of Sui Northern Gas Pipelines Ltd (SNGPL), AmjadLatif, recently told the Senate committee on circular debt that the companypurchases natural gas from about 40 gas producers at an average rate ofRs629 per million British thermal units (MMBTU) and sells it for Rs399 perunit, at a net loss of about Rs230 per unit.
He also said the SNGPL had total outstanding receivables of Rs165 billionas of August 20, against payables of Rs171 billion. The major receivablesinclude Rs21 billion from power companies, Rs20 billion from all otherconsumers, and Rs123 billion from the government, all on the account of theprice differential.