CNG Sector, Industry Reject SSGC’s Gas Tariff Hike Demand

Industrial and CNG (Compressed Natural Gas) sector on Monday rejected Sui Southern Gas Company’s (SSGC) demand to raise tariff by Rs58.42/mmBtu at an Oil and Gas Regulatory Authority (OGRA) public hearing, a statement said.

Public hearing, presided over by Chairman OGRA Masroor Khan, was attended by high officials of SSGC as well as representatives of trade bodies, which not only vehemently opposed SSGC’s demand, but also came down hard on it for resorting to loadshedding and showing discrimination towards industries in Karachi and elsewhere in Sindh and Balochistan.

SSGC sought the increase in gas tariff through a petition for its estimated revenue requirement for FY2021-22.

According to petition, SSGC projected a shortfall in revenue requirement of Rs18.399 billion for FY 2021-22 and demanded increase in its average prescribed price by Rs58.42/mmBtu effective July 01, 2021 and the petitioner also estimated RLNG cost of services at Rs30.48/mmBtu.

OGRA under section 8(2) of the OGRA Ordinance, 2002, read with Rule 4(3) of Natural Tariff Rules, 2002 held the public hearing and reserved their decision, which would be passed in due course of time.

While talking to media, Chairman OGRA dismissed the impression that public hearing for gas tariff revision was of no use as it was determined either under the IMF diktat or the government’s politically-motivated behest.

“There is a structured mechanism for gas tariff revision and public hearing is an essential part of it,” Khan asserted. Earlier, During the public hearing, Raziuddin, a representative of All Pakistan Textile Mills Association (APTMA) questioned how could SSGC put the estimates for revision in tariff for the whole financial year based on the two months’ calculations?

He also sought the model for gas tariff revision, asking whether it was based on economic theory or political grounds. Ghias Paracha, representative of CNG sector deplored the gas supply to CNG sector was disconnected on the pretext of shortage of gas in the system despite the fact the sector paid the highest price of gas in the country.

Paracha also questioned the discontinuation of supply to CNG sector when it was determined in the policy that imported RLNG would be supplied to IPPs and bulk consumers including CNG retailers.

He said CNG sector was being discriminated in gas supply and asked who would be responsible for the people, being rendered unemployed due to closure of CNG stations.

Zubair Motiwala on behalf of Karachi Chamber of Commerce & Industry, opposed the SSGC petition, saying it was not the time for raising the tariffs. Motiwala pointed out Sindh was being deprived of its due share by diverting gas from south to north, which according to him had been estimated at 180mmcf.

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