The Planning Commission has opposed the proposed increase in gas prices and said that this would adversely affect the consumers, particularly the low-income group that falls in the category of lifeline consumers and industrial sector.
The Commission said that the government gives subsidy on gas rates to protect the low-income group, and the increase would hit this category seriously.
Moreover, it added, the industrial sector was already overburdened by high utility rates and feeling difficulty to compete in the world market due to high production cost of its products and further increase in gas rates make it more incompetitive in the world market.
The Planning Commission''s views came in response to Oil and Gas Regulatory Authority (Ogra) query regarding SNGPL plea for increase in gas rates from January 1, 2006.
The regulatory body sought comments from the concerned departments on the application for upward revision in the rates, before taking up public hearing.
Sources said Ogra had sought comments from Planning Commission, Ministry of Finance, Ministry of Petroleum and social sector non-governmental organisations (NGOs) on SNGPL plea.
The Planning Commission said that the rates of important inputs like gas would enhance the cost of industrial products.
Sources told Business Recorder on Friday that the Planning Commission had outrightly rejected Sui Northern Gas Pipeline Limited''s (SNGPL) claim that it needed additional funds for expansion plan.
The Commission wants that SNGPL should improve its efficiency and cut down line losses to control expenditures to meet its development programme.
SSGC provides gas to Balochistan and Sindh and SNGPL to Punjab and NWFP.
Both gas distribution companies have been directed by the government to keep on expanding their networks to supply this cheap source of energy to new areas.
SNPGL in its plea to Ogra said that reasonable increase in gas tariff was inevitable to fulfil its payment commitments to oil and gas exploration and production companies, besides ensuring sufficient funds for the future expansion plan.