Gas sector circular debt stands at Rs 900 billion: Ogra to hold public hearing on SSGC petition tomorrow – Business & Finance
ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) will hold a public hearing on Monday (tomorrow) on a petition by the Sui Southern Gas Company (SSGC) regarding its revenue requirement for the financial year 2022-23 of Rs 184,881 million, including Rs33.787 million of unrecovered shortfall for the year 2021-22, and seeking an increase in the prescribed average price of Rs667.44 per mmbtu in its prices from 1 July 2022 to compensate for the increase the cost of gas and other items mentioned in the petition.
The cost of gas is tied to the international price of crude oil/fuel oil in accordance with agreements between the federal government and the gas producers.
According to government estimates, meanwhile, circular debt in the gas sector has reached Rs 900 billion.
The gas company is said to be facing severe financial crisis due to non-payment of RLNG bills by Karachi Electric (KE) which reached over Rs 27 billion.
In a letter to the Power Division – General Directorate of Gas (Petroleum Division) – the utility suggested that its outstanding payments against KE have accumulated at an alarming level of Rs27.013 billion (excluding LPS of Rs2.645 billion ) and this situation is detrimental to the sustainability of the company and can even jeopardize its financial structure.
Sui Northern Gas Pipelines Ltd reduced UfG to 8%, but SSGC’s UfG is still at 13% due to illegal gas connections in Karachi and gas theft in Balochistan.
Copyright Business Recorder, 2022