ISLAMABAD – Federal government may increase the price of Gas upon therecommendations of the Sui Southern Gas Company (SSGC).
SSGC has filed a petition to raise the gas tariff by Rs109.03 per millionBritish Thermal Units (mmbtu) with effect from July 1, 2018.
SSGC through a public notice on Tuesday said the revenue would enable it tomeet the cost of gas, operating and return on assets. “The cost of gas islinked to the international price of crude oil/fuel oil in accordance withthe agreements between the federal government and the gas producers,” thenotice said.
The SSGC document revealed that the cost of gas has been Rs460.33/mmbtu andafter adding the operating cost, depreciation, return on assets, subsidyfor LPG Air-Mix projects, UFG adjustment, other operating income, theaverage prescribed price turned out to be Rs531.23 / mmbtu.
Currently, SSGC charges the average prescribed price of Rs422.20 /mmbtu,and has proposed an increase of Rs 109.03/mmbtu.
Head of research Zeeshan Afzal at Insight Securities said it was a routinematter of gas companies to file recommendation for tariff increases to earnthe fixed return on operating assets after incorporating operating costsand allowed UFG losses.
However, he added, “The government since last few years has avoidedincreasing consumer prices to benefit the consumers by making adjustmentsin gas subsidies.”