June 21, 2007	Thursday	Jamadi-us-Sani 05, 1428

ISLAMABAD, June 20: The government is expected to freeze natural gas tariff until Dec 31, 2007, on the recommendations of the Oil and Gas Regulatory Authority (Ogra), it is learnt.

Informed sources told Dawn that the Ogra had forwarded its recommendations to the federal government on the basis of its half-yearly review of accounts of the two gas utilities -- Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) – and their prescribed prices.

The government’s formal announcement about no change in natural gas tariff is expected by the end of this month.

The notification is to take effect on July 1, 2007, under the law that requires the government to revise gas rates bi-annually in July and January on the basis of Ogra recommendations.

The Ogra has determined that prescribed prices of SNGPL required a minor increase of Rs1.78 per MMBTU (million British Thermal Units) on the basis of its revenue requirements and expenditures for the year 2007-08. Therefore, the increase has been adjusted in the consumer categories where prescribed prices were lower than consumer prices.

“The increase of Rs1.78 per MMBTU in the petitioner’s average prescribed price has been adjusted in those categories of consumers where prescribed price was less than the sale price,” the Ogra said in its determination on SNGPL.

Similarly, the scrutiny of SSGCL accounts revealed that it required a nominal 27 paisa per unit (MMBTU) increase in its prescribed prices to meet the difference between its revenue requirement and expenditures. This, too, has been adjusted against comparatively higher gas development surcharge. “Increase of Re. 0.27 per MMBTU in the SSGCL’s average prescribed prices has been adjusted in those categories of consumers where prescribed price was less than the sale price,” the Ogra said.

Last time, the government had reduced gas prices for domestic consumers by 7.82 per cent and 10 per cent for industrial and commercial consumers effective Feb 1, 2007, although the Ogra had proposed a 10 per cent reduction with effect from Jan 1.

The Ogra is mandated to determine revenue requirement of gas utility companies after holding public hearings and taking into consideration purchase price of natural gas from the producers in accordance with the applicable agreements on biannual basis.