The Sui Southern Gas Company Limited (SSGC) wants to increase the gas tariff from Rs. 78.95 per MMBTU to Rs. 822.25 per MMBTU for the financial year 2020-2021, a national daily reported.
The Oil & Gas Regulatory Authority (OGRA) will hold a meeting today (Monday) in this regard amidst strong criticism from the All Pakistan Textile Mills Association (APTMA).
The SSGC has filed a request for the reviewing of the prescribed gas tariff under its estimated revenue requirement (RERR) for 2020-21. The company has said that it is facing a shortfall of more than Rs. 28 billion in revenue. The company has also included Regasified Liquid Natural Gas (RLNG) losses despite the fact that this business is ring-fenced and cannot be included in the petition, and despite also being a petroleum product business and not a gas-related one.
The petition filed by the SSGC reveals that the company is facing a shortfall of Rs. 22.741 billion in the natural gas sector and Rs. 5.241 billion in the RLNG business. The SSGC also requested the inclusion of Rs. 9.4 billion as UFG (un-accounted for gas) to tackle the distribution losses of RLNG and natural gas.
The non-payment of the gas development surcharge is adding another burden of Rs. 50.983 billion on the losses that are receivable up to the financial year 2017-18. The company is also seeking the required return on fixed assets at 17.43 percent (Rs. 7.079 billion) for natural gas and at Rs. 5.2 billion for imported gas (RLNG) nest assets.
In response to this petition, the APTMA has also prepared a presentation, which, it says, will provide a strong rebuttal to the SSGC’s claims. The APTMA states that the UFG adjustment may be kept at Rs. 52.85 per MMBTU. In the review petition, the UFG has been mingled with RLNG, which is against the concept of the ring-fence.
The APTMA will also oppose the inclusion of the GDS (gas development surcharge) by the SSGC in the revenue requirement making it part of the tariff. Its argument is that the GDS is a receivable from the government and not the consumers.