ISLAMABAD/KARACHI: The business community has appeared sceptical about the petition filed by the Sui Southern Gas Company Ltd (SSGCL) to the Oil and Gas Regulatory Authority (Ogra) seeking an increase of Rs667.44 per mmBtu in its prescribed prices for FY23.

Businessmen said that industries should not be overburdened and gas price hikes should be applied to fertiliser, commercial and domestic sectors as well.

The SSGCL has sought an increase in gas prices by projecting a revenue shortfall of Rs184.88 billion in the next fiscal, apart from Rs26.23 per mmBtu in terms of RLNG service cost.

A public hearing was held by Ogra on Monday to review SSGCL’s petition to consider comments from the relevant stakeholders before taking any formal decision.

The gas company informed the regulator that it faced a revenue shortfall of Rs33.78bn that was not reimbursed by the government pending since the end of 2021-22.

The SSGCL officials further said that the utility had filed a review petition relating to changes in the well-head prices of natural gas and estimates of gas off-takes. It refers to the revision in the cost of gas prices that are estimated at $99.96 per barrel for crude oil and $505.44 per tonne for HSFO, at the exchange rate parity of Rs231 per US dollar.

The gas utility said that the Economic Update and Outlook for September, released by the Finance Division, has given a CPI inflation rate of 26.1pc during 2MFY23 versus 8.4pc in the same period last fiscal year.

On SSGCL’s calculation on revenue shortfall and expenditure at a dollar rate of Rs231, Chairman Businessmen Group (BMG) and former president of Karachi Chamber of Commerce and Industry (KCCI), Zubair Motiwala told the hearing that Finance Minister Ishaq Dar has assured time and again to bring down the dollar to less than Rs200 while it was currently hovering around Rs224. The 15pc difference was already there and more was likely hence, the SSGCL should trust the finance minister’s word and accordingly come up with estimates for its expenditures.

He also questioned SSGCL’s plans to lay pipelines which were not making any sense as the industries had already closed down due to the unavailability of gas. “Why are these pipelines being laid when there is no gas,” he questioned, adding that instead of laying new pipelines, SSGCL should replace old and rusted pipelines to save gas from leakages and bring down the exorbitant unaccounted for gas (UFG) losses.

Published in Dawn, November 22nd, 2022