Effective next month: no relief for SSGC consumers despite Ogra reduction

The Oil and Gas Regulatory Authority (Ogra) has approved an increase of Rs 107.81 per mmbtu in gas tariff for the consumers of Sui Northern Gas Pipelines Limited (SNGPL), while a reduction of Rs 25.32 per mmbtu for the consumers of Sui Southern Gas Company (SSGC), effective January 1, 2016. SSGC consumers, however, will derive no benefit from this reduction because of a unified gas tariff across the country.
As a result of the Ogra decision, from January 2016, the gas tariff will go up by 38 percent for SNGPL consumers. Ogra has approved an increase in gas tariff by Rs 107 per Million British Thermal Unit (mmbtu) for the consumers of SNGPL, while the regulator has approved a reduction in gas tariff for the consumers of SSGC by Rs 25.32 per mmbtu. However, the gas consumers on the network of SSGC will remain unable to avail of the benefit of the Ogra decisions as the government has approved a unified gas tariff across the country. The average prescribed gas price for the SNPGL will go to Rs 510.95 per mmbtu from Rs 403.14 per mmbtu, the gas utility will generate an amount of Rs 213 billion as a result of gas tariff hike.
The authority has rejected SNGPL''s request to fix Unaccounted for Gas (UfG) benchmark at 7.32 percent, fixing UfG at 4.5 percent. The regulator has deducted Rs 8.37 billion from SNGPL''s revenue on account of additional UfG levels. The SNGPL authorities also requested the regulator to put an additional burden of Rs 75 billion on gas consumers on the network so that the gas distributor can lay gas pipeline for transporting imported Liquefied Natural Gas (LNG) from Karachi to Lahore, but the regulator rejected the plea.
However the regulator approved Rs 30 billion for the construction of gas pipeline directing the gas distributor to get this amount from the federal government under the head of Gas Infrastructure Development Cess (GIDC). The government so far has collected an estimated amount of Rs 200 billion on account of GIDC, under the GIDC Act. This amount should be spent on gas pipeline projects including Turkmenistan-Afghanistan-Pakistan-India (TAPI), Iran-Pakistan (IP) and LNG pipelines.
The regulator wile approving a reduction of Rs 25.32 in the gas tariff of SSGC as it reduces from Rs 447.56 per MMBTU to Rs 422.24 per MMBTU. However, the regulator did not change the status of UfG for SSGC as it will remain 7 percent in accordance with Sindh High Court stay. SSGC will generate Rs 184 billion revenue, the gas distributor has started receiving LPG royalty from JJVL''s LPG plant as a result the regulator approved a reduction in gas tariff of the company.