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Gas tariff up by Rs9.66

The Oil and Gas Regulatory Authority (Ogra), while determining the final revenue requirement and real income of the two gas utilities, Sui Southern and Sui Northern for the last fiscal 2011-12, has increased the gas tariff of the Sui Southern and decreased the tariff of Sui Northern.

The most agonising part of the decision is that the relief of Rs7.91 per MMBTU (million British thermal unit) on of reduction in gas tariff of Sui Northern will not be passed on to the end consumers.

However, the gas consumers will be fleeced from July 1, 2013 as the increase in tariff of Rs9.66 per MMBTU determined by the regulator in the tariff of Sui Southern will directly be passed on to them.

According to the much belated decision of the Ogra about the finalization of revenue requirement and the real income of both the gas utilities for the fiscal FY2012 of which the copy is exclusively available with The News, the regulator has increased the gas tariff of Sui Southern by Rs9.66 per MMBTU and decreased it by Rs7.91 per MMBTU for Sui Northern.

The most alarming aspect of the decision is that the gas consumers would be deprived of the relief of Rs7.91 per MMBTU in reduction of gas tariff for Sui Northern as the said relief would be included in the head of gas development surcharge and to be passed on to the provinces as per the formula of the federal government.

According to the documents, the regulator has determined the annual income of Sui Northern at Rs224.90 billion in last financial year (FY) 2012 whereas its revenue requirement target was at Rs220.49 billion showing the additional income Rs4.41 billion. This additional income is to become the part of the pool of gas development surcharge that will later be passed on to the provincial governments.

Under this head the federal government has already collected Rs9 billion from the gas consumers of Khyber Pakhtunkhuwa and Punjab. With the latest decision of the Ogra, this amount would swell further to Rs13.5 billion out of which the amount of Rs9.72 billion will be dispatched to the Sindh government under the formula.

Now comes the decision of Ogra about the Sui Southern under which the gas tariff has been increased by Rs9.66 per MMBTU. The regulator has found that the income of Sui Southern remained at Rs131.58 billion in the last financial year 2012 against its revenue requirement fixed at Rs134.90 billion. This is how the Sui Southern braved the loss of Rs3.3210 billion that will be fleeced from the gas consumers from July 1, 2013.

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