Gas prices likely to rise by 221%

Gas prices likely to rise by 221%

Gas prices likely to rise by 221%
Islamabad: The Oil and Gas Regulatory Authority (OGRA) proposes to increase prices for gas consumers by 221% from January 1, 2020.

The aforementioned increase is intended to raise additional funds of Rs 40 billion required for two gas companies.

In two separate decisions sent to the government in this regard, the regulator has raised the fixed price by about 13% (Rs. 82 per unit) for Rs. 707 per unit for Sui Northern Gas Pipelines Limited (SNGPL), which will generate additional revenue of over Rs 30 billion for the next six months of the company.

Similarly, the regulator has fixed the British thermal unit (MMBTU) at Rs 795 per quote for the Sui Southern Gas Company (SSGC) at a fixed price of 8 percent or 57 percent.

The Karachi-based gas company is expected to generate additional revenue of about Rs 8 billion between January 1 and June 30, 2020.

Under current practice, a fixed price of SNGPL is applicable at the same rate for the country including SSGC, so the effective average rate works at Rs 707 per unit instead of the current Rs 629.

The regulator said that it did not include last year's adjustments in the determination of revenue for the two companies, but the government could add these amounts to the revenue requirements and the average price would be Rs 785 instead of Rs 707 per unit. The average fixed price per MMBTU must be set.

However, in such a case, the average will have to be increased by 25% (Rs. 156 per unit) instead of 13%.

It should be noted that the government has already increased gas prices by 143 percent in September 2018 and 191 percent in July this year.

In addition, the regulator has proposed a 192% increase in the price of domestic users using 50 cubic meters per month, which is Rs 353 to 46 paise per mmBtu, from the current Rs 121 per unit.

Similarly, an increase of 18% is recommended for users who use up to 100 cubic meters per month.

On the other hand, Ogra has considered a reduction of about 4% for domestic users using less than 300 cubic meters, and rates for 200 cubic meters will be reduced to Rs 530 per unit and 300 cubic meters to 707 per unit. ۔

In addition, prices have been set to increase by 15% for domestic consumers using more gas, which will cost Rs. 1,600 per unit for users who consume up to 400 cubic meters per month and for users who are more than 400 cubic meters. One thousand 680 rupees has been fixed.

In addition, OGRA has proposed a gas price increase of more than 221% for all categories of specialized commercial consumers (except for bread ovens that use more than 300 cubic meters monthly).

Similarly, a 32% flat increase is proposed for commercial consumers, ice factories, general industries, registered manufacturers of export products, cap to power, cement factories and CNG commercial customers.

Meanwhile, the regulator has proposed an increase of 214% for domestic users connected to the SSGC network using less than 50 cubic meters and 27% for those using up to 100 cubic meters.



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