OGRA determines gas price at Rs778.59 per mmbtu for SSGC

ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) has increased gas price for consumers of Sui Southern Gas Company Limited (SSGC) by 5.4pc, besides determining the prescribed gas price at Rs778.59 per million British thermal units (mmbtu).

OGRA, while taking a decision on SSGC’s review petition for Estimated Revenue Requirement (ERR), has provisionally determined a shortfall in ERR for FY21 at Rs14,270 million, in addition to previous year’s shortfall of Rs50,983 million. Accordingly, the authority determined the prescribed price at Rs778.59 per mmbtu for each category of gas consumers as determined under section 8 (2) of OGRA Ordinance, 2002.

The authority, as a matter of principle under legal domain, was of the view that all the classes of consumers should at least pay the average cost of service or the average prescribed price.

As per OGRA’s decision, the prescribed price may be readjusted upon the receipt of federal government advice under section 8 (3) of the OGRA Ordinance in respect of sale price of gas for each category of retail consumers so that SSGCL is able to achieve its total revenue requirements in accordance with section 8 (6) of the Ordinance.

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Under the said section, the federal government is required to advise the authority within 40 days regarding the minimum charges and sale price for each category of retail consumers for notification in the official gazette. “If the government fails to advise within the said period and the prescribed price for any category of retail consumers determined by the authority is higher than the most recently notified sale price for that category of retail consumers, OGRA will be obliged to notify in the official gazette the prescribed price as determined by the authority to be the sale price for the said category of retail consumers.”

According to sources, the government may take necessary action under section 8 (3) of the ordinance and advise the authority to go ahead with the revised sale price for each category of retail consumers of natural gas for notification in the official gazette within the stipulated time period.

“The current sale price is on the higher side, so there will be no impact on the price,” an insider said.

The OGRA, in its decision, also directed SSGC to focus on reducing Unaccounted for Gas (UFG), improving internal control systems, increasing efficiency, and ensuring quality of service.

Earlier, the SSGCL, in an instant review petition, had claimed aggregate increase in prescribed price of Rs78.95 per mmbtu with effect from July 1, 2020.

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Ahmad Ahmadani
Ahmad Ahmadani
The author is an investigative journalist. He can be reached at [email protected]

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