Ogra (Oil and Gas Regulatory Authority) determines 46pc rise in gas prices

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ISLAMABAD: After almost a four-year freeze, natural gas prices are estimated to jump by an average 46 per cent with effect from July 1 owing to expansion in supply network, induction of imported gas and addition of millions of domestic gas connections on a political basis.

The Oil and Gas Regulatory Authority (Ogra) has forwarded two separate determinations regarding the prescribed prices of two troubled gas utilities — Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) — to the government just before the regulator’s chairperson and a team of senior petroleum division officials left for the United States on a three-week visit.

The increase in prescribed prices is based on estimated revenue requirements of the two utilities for the fiscal year 2018-19 and is worked out keeping in mind various projects under implementation and other expenditures.

The regulator has determined up to 186pc increase in gas rates for the poorest categories of domestic and commercial consumers who are currently cross-subsidised, while the prescribed rates for other categories — industrial, cement, CNG, power and commercial sectors — have been jacked up by 27 to 31pc for the two gas utilities.

Under the law, Ogra is required to notify final consumer-end prices for each category based on recommendations of the government. The government can change the rates for various consumers by shifting the burden from one consumer category to the other but without affecting the overall revenue requirement determined by the regulator.

Ogra has determined that the SSGC — which serves Sindh and Balochistan — would need Rs167 billion during the next fiscal year to finance its ongoing programmes. Therefore, it has approved an increase of 45.54pc (Rs184.34 per unit) in the average prescribed price to Rs589.09 per MMBTU (million British thermal unit) from Rs404.75.

Likewise, the regulator has approved the 2018-19 revenue requirement for the SNGPL at Rs287bn, necessitating an average prescribed price of Rs629.33 per MMBTU, an increase of 3.37pc (Rs20.57 per unit) from Rs608.76. SNGPL’s service areas cover Punjab and Khyber Pakhtunkhwa.

Ogra has determined gas prices for the poorest domestic and commercial consumers using less than 100 cubic metres per month at Rs294.55 per MMBTU, up by 180pc from Rs105.15. The consumers in second slab using up to 300 cubic metres per month (both commercial and residential) would be charged Rs589.09 per unit instead of Rs210.31, a rise of 180pc.

The prescribed price for the third domestic slab of more than 300 cubic metres per month has been raised by 26.4pc to Rs664.52 per unit from Rs525.76 and that of the commercial category by 26.4pc to Rs797.42 per unit from Rs631.

All other categories in larger commercial and industrial units, ice factories, captive power plants, CNG stations, cement and fertiliser plants, public sector power houses and independent power plants will face a 26.4pc increase. Commercial consumers and ice factories will be charged Rs798 per unit instead of Rs631 and industrial consumers, Pakistan Steel, Wapda plants and IPPs Rs611 per unit, instead of Rs484. Captive power plants of industrial units will be charged Rs718 per unit instead of Rs568 and CNG stations Rs822 per unit instead of Rs650.

The highest rate of Rs930 per unit will apply to cement factories that were paying Rs736. The feedstock gas for Fauji Bin Qasim Fertiliser will be Rs156 per unit instead of Rs123.

For SNGPL, Ogra has increased the prescribed price for the poorest domestic and commercial categories by 186pc and for all other categories by about 30pc.

The regulator said it had taken into account increased proportion of LNG in the gas system, local gas constraints and legal challenges arising thereof and believed that all classes of consumers should at least pay the average cost of service or the average prescribed prices.

https://www.dawn.com/news/1415932/ogra-determines-46pc-rise-in-gas-prices

 

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ISLAMABAD: The government is likely to keep the prices of petroleum products largely unchanged for November as the Oil and Gas Regulatory Authority (Ogra) has worked out minor adjustments in the costs of various imported products.

A senior official at the ministry of energy said that Ogra had worked out an increase of Re1 and 27 paisa in the prices of every litre of petrol and high speed diesel (HSD), respectively. On the other hand, it proposed a reduction of Rs2.39 and Rs6.56 respectively in the prices of every litre of kerosene and light diesel oil (LDO).

According to him, the government will be losing only about Rs650 million if it keeps the prices largely unchanged for next month, but will earn a lot of goodwill at a time when opposition parties are holding big protest rallies.

The official said a decision in this regard would be announced on Thursday (today) by the finance division after the approval of prime minister.

Based on the import parity price of Pakistan State Oil for purchases in September, the regulator has worked out the ex-depot price of HSD at Rs127.41 per litre instead of Rs127.14 at present, showing an increase of 0.2 per cent (or 27 paisa per litre).

Likewise, the ex-depot price of petrol is proposed to be increased to Rs114.24 per litre from the existing rate of Rs113.24, an increase of 0.88pc (or Re1 per litre).

The regulator has worked out the ex-depot price of LDO at Rs85.33 per litre against the existing rate of Rs91.89, which means a reduction of 7.13pc or Rs6.56 per litre. Similarly, the ex-depot price of kerosene has been worked out at Rs97.18 per litre for November instead of Rs99.57 at present, which means a reduction of 2.4pc (or Rs2.39 per litre).

The official explained that the government would gain Rs750m on account of increase in the prices of HSD and petrol but would lose about Rs100m due to decrease in the prices of kerosene and LDO. The net revenue loss to the government would, therefore, be about Rs650m.

The government has already increa*sed the general sales tax for all petroleum products to a standard rate of 17pc to generate additional revenues. Until January, the government was charging 0.5pc GST on LDO, 2pc on kerosene, 8pc on petrol and 13pc on HSD.

Also, the government has in recent months more than doubled the rate of petroleum levy on HSD to Rs21 per litre against Rs8 per litre, while the levy on petrol has been increased by 50pc to Rs17.2 per litre instead of Rs10 per litre. The petroleum levy on kerosene oil and LDO is currently being charged at the rate of about Rs5 per litre.

The government has begun increasing petroleum levy rates to partially offset a revenue shortfall of over Rs113 billion faced by the Federal Board of Revenue in the first quarter of the current fiscal year.

The levy remains in the federal kitty unlike the GST that goes to the divisible pool, of which about 57pc is grabbed by the provinces.

Petrol and HSD are the products that generate much of the revenue for the government due to their massive and yet growing consumption in the country. About 800,000 tonnes of HSD are sold every month in the country against a monthly consumption of around 700,000 tonnes of petrol. The sales of kerosene oil and LDO are generally less than 10,000 tonnes per month.

Last month too the government had kept the petroleum prices unchanged, earning windfall revenue of over Rs4.5bn in the process. The regulator had proposed a 2.6pc reduction in the prices.

Source: https://www.dawn.com/news/1513949/ogra-proposes-slight-increase-in-petrol-hsd-prices.

 

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The federal government on Thursday through a notification issued by the Ministry of Finance announced a Re1 increase in the price of petrol for the month of November.

The price of petrol was increased from Rs113.24 to Rs114.24 per litre, as per the recommendations of the Oil and Gas Regulatory Authority (OGRA).

High speed diesel (HSD) price was increased by Rs0.27 per litre as it went up from Rs127.14 per litre to Rs127.41 per litre.

The prices of kerosene and light diesel oil (LDO) saw a reduction of Rs2.39 and Rs6.56 respectively. Kerosene, this month, will be priced at Rs97.18 and light diesel oil at Rs85.33.

A day earlier, an OGRA official had said that the government will be losing only about Rs650 million if it keeps the prices largely unchanged for next month, but will earn a lot of goodwill at a time when opposition parties are holding big protest rallies.

The government has begun increasing petroleum levy rates to partially offset a revenue shortfall of over Rs113 billion faced by the Federal Board of Revenue in the first quarter of the current fiscal year.

The levy remains in the federal kitty unlike the GST that goes to the divisible pool, of which about 57 per cent is grabbed by the provinces.

Petrol and HSD are the products that generate much of the revenue for the government due to their massive and yet growing consumption in the country. About 800,000 tonnes of HSD are sold every month in the country against a monthly consumption of around 700,000 tonnes of petrol. The sales of kerosene oil and LDO are generally less than 10,000 tonnes per month.

Source: https://www.dawn.com/news/1514044/govt-increases-petrol-price-by-re1-for-november.