Sui Northern Gas Pipelines Limited (SNGPL) has demanded an increase of Rs 773.50 per mmBtu to recover arrears and to meet increasing financial needs. The gas distribution companies are demanding recovery of Rs 250 billion from the consumers because of the increase in gas prices.
In a public hearing conducted by Vice-Chairman Oil & Gas Regulatory Authority (OGRA), Noor ul Haq reviewed the estimated revenue requirements. The management of SNGPL headed by Managing Director Amer Tufail demanded that the OGRA should allow them to increase gas tariff by 773.50 mmBtu. The CFO of SNGPL said that by increasing the meter rent the company will collect over Rs 1 billion of additional revenue. They said that whatever increase they’re demanding is to meet the existing operational cost.
During the hearing, the official of SNGPL said that to improve the distribution of gas they need an additional Rs 34 billion. The general manager human resource said that in the last 5 years the HR cost of the company increased by 11 percent, whereas the company now needs an additional workforce of 4,500 to meet its growing needs.
Furthermore, the officials said that OGRA is avoiding ground realities while revising the tariff as the repair and maintenance cost is showing an upward trend. Apart from this, the security requirement is gradually increasing. Also, due to legal disputes and the lengthy delay in court proceedings recovery of Rs 40 billion is stuck-up. They warned that if the increase in gas tariff is not allowed, the fate of SNGPL will not be different from Pakistan Steel Mills.
SNGPL officials despite admitting the fact that the existing system does not permit them to issue new connections, urged OGRA to allow them to provide at least 3 lac new connections. However, member All Pakistan Textile Mills Association (APTMA), Shahid Sattar said that SNGPL is showing its inability to meet the existing demand of gas consumers. He also alleged that by increasing the charges and taxes on imported LNG it will not remain feasible for the local industry to use it as a fuel.
The Chief of All Pakistan CNG Association Ghiyas Paracha said that SNGPL’s Rs 40 million are stuck in legal disputes as their officials violated the OGRA rules and regulations. Paracha also accused SNGPL of increasing gas prices after six months without proper justification. He said before increasing the tariff of gas OGRA should give consideration to the fact that how it will impact the common man, who is already burdened by inflationary pressures.
Vice-Chairman OGRA Noor-ul-Haq said that feed-back given by all stakeholders during the hearing will get due consideration. He said while revising the tariff that the interest of SNGPL, industry and the common man will be protected.
It is worth mentioning that Special Assistant to Prime Minister Nadeem Babar on Wednesday in a media briefing said that the government will allow the gas distribution companies to recover their arrears of Rs 250 billion not in one year but gradually so the consumers will not have to face burden. He said that circular debt of gas distribution companies piled up because the PML-N government didn’t increase the gas tariff despite the fact that the gas production cost increased substantially.