ISLAMABAD/KARACHI: Sindh industry, strongly opposing the Sui Southern Gas Company (SSGC)‘s 87 percent above the November increase in industry’s tariff for the winter season to cross-subsidize especially the profit-making fertilizer sector, has termed it unlawful as tariff revision is the prerogative of the Oil and Gas Regulatory Authority (Ogra) and the federal government.
A number of industrial, commercial, domestic interveners attended the public hearing on the Review Estimated Revenue Requirement (RERR) petition of the SSGC for fiscal year 2023-24 physically and virtually. The gas company has sought an increase in the average prescribed price of Rs226.18 per mmbtu.
The petitioner has projected a shortfall in revenue requirement for the fiscal year 2023-24 at Rs47.773 billion with effect from July 1, 2023. Masroor Khan, chairman OGRA presided the public hearing held on Monday at a hotel in Karachi.
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Representing the business community of Karachi, Muhammad Zubair Motiwala accused the SSGC to revise the gas tariff for the current winter by 87 percent through blending of 25 percent LNG in indigenous gas. In addition, the industrial units have been served disconnection notices which did not pay the winter gas bill with additional charges of 25 percent blend of RLNG in natural gas.
The growth in profitability in the first quarter of the current fiscal year and the last financial year of fertilizer sector, the sector need no cross subsidy, he added.
In case, cross-subsidy on domestic, fertilizer, Tandoor is abolished than the Sindh industry tariff increase would be 10 percent in winter, he maintained.
He further alleged that the company also did not mention five per cent saving by reducing UfG from 12.5 to seven percent in Balochistan. The UfG issue in Balochistan is not a new one.
He further said the Sindh industry would plead its case before Ogra and the federal government.
Sharaz Khan, representative of South All Pakistan Textile Mills Associations (APTMA) said the SSGC was not clear in its petition regarding objectives and targets. He further suggested the UfG should be reduced to four percent of international standard and 12.5 percent was unacceptable for the industry.
A representative from domestic consumers asked the Ogra to allow marketing and sale of LPG to domestic consumers rather than blending expensive RLNG in local gas supply to the domestic sector. He said LPG air mix should be cross-subsidised.
Zeeshan Bashir, an industrial sector representative said that gas price has been increased. He said the imported and domestic gas share in the energy mix was 25 and 75 percent in August and now it is being revised to 40 and 60 percent, which would not be feasible for the industry.
Earlier, Managing Director SSGC Imran Maniar said the UfG percent in Balochistan was too high as compared to Sindh.
A recent study suggested that 72 percent of gas meters in Balochistan are tempered. He further asked the chairman Ogra to issue licences for supply of gas from some wells as the case had been pending with Ogra.
Chief Financial Officer (CFO) SSGC Amin Rajput asked the regulator to allow them an increase in the human resource cost keeping in view the CPI index which had reached 40 percent.
He further said to look into federal excise duty (FED) on RLNG which increased manifold.
Copyright Business Recorder, 2023
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