SSGC Proposes Increase in Gas Prices for FY21-22

Sui Southern Gas Company (SSGC) has proposed to increase gas prices by Rs. 109.78 per mmbtu, to charge Rs. 789.24 per mmbtu for the next financial year (FY21-22). However, after stakeholders’ objections to this proposed increase, the Oil and Gas Regulatory Authority (OGRA) conducted a public hearing to review the gas price hike. ALSO READ CNG Sector Demands Withdrawal of 17% GST on Imported LNG Chairman OGRA Masroor Khan chaired the public hearing while member (Oil) and Member (Gas) were also present on this occasion. Currently, the gas price prescribed by SSGC is Rs. 679.56/mmbtu. According to the SSGC, the gas distribution company is facing losses of Rs. 3.34 billion in the sale of gas and in RLNG around of Rs. 16 billion. The SSGC calculates gas prices at a specific rate of Rs. 169 per dollar. One way to avoid this hike is for OGRA to recommend utilization of GIDC to cause a reduction in gas prices, recommended a consultant of All Pakistan Textile Mills Association (APTMA). Another recommendation came from the Karachi Chamber of Commerce and Industry that suggested that there needs to be a crackdown on the practice of natural gas being sold as RLNG, which is causing a price hike. ALSO READ ITFC Grants Pakistan $4.5 Billion for Import of Oil & LNG Pakistan’s average gas consumption stands at approximately 3,723 Million Cubic Feet per Day (MMCFD), as of July-Feb 2021 figures. Pakistan has an extensive gas network of over 13,315 kms transmission 149,715 kms distribution and 39,612 kms services gas pipelines, providing gas to over 10.3 million consumers.