ISLAMABAD, Jan 12: The consumer prices of gas are likely to increase by up to nine per cent this month (January) to meet about Rs5 billion revenue shortfall of the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), it is learnt.

A senior government official, however, told Dawn on Wednesday that the ministry of petroleum and natural resources had opposed the gas price hike and asked the government to bear this additional burden.

The official, requesting not to be named, said the Oil and Gas Regulatory Authority (OGRA) had increased the prescribed prices of the SNGPL and SSGCL with effect from Jan 1, 2005, having a cumulative impact of about Rs5 billion.

This amount has to be passed on to the consumers to meet the revenue shortfall of the two companies, or otherwise the federal government would have to pick it up as a subsidy. He said the government had 40 days under the law to take a decision whether or not to pass on the impact to the consumers.

Sources said the petroleum ministry had presented five different scenarios for increase in the gas price to recover the shortfall, but pleaded that any increase in the prices would not be advisable at this stage because of rising petroleum prices in the country.

These sources said the government had not passed on about Rs7-8 billion revenue impact to the gas consumers, which was due in July last year, and equalised the wellhead prices of all gas fields at a uniform rate.

Had that exercise not been done, the prices might have increased by an average 12 per cent in July 2004. The government, said the sources, was required under a cabinet decision to revise consumer gas prices on a six monthly basis i.e., on the first of July and January every year.

The government, the sources said, had been delaying complete implementation of its gas prices rationalisation programme since 2001 on various considerations, but there was always a point when difficult decisions could not be avoided.

The official, however, explained that while the gas prices for almost all the consumer groups had not increased significantly during the last couple of years, the prices of industrial gas consumers had been on the decline so as to make Pakistani goods competitive in the market.

SUPPLY STOPPED: The gas supply to eight power units and three fertilizer plants on the Sui Northern system has been stopped owing to around 600 MMCFD (million cubic feet of gas per day) reductions in supplies as a result of attack on gas installations in Balochistan, it is learnt.