The government is set to increase the system gas tariff by up to 50 percent in yet another step to pave the way for the International Monetary Fund (IMF) bailout.
The Ministry of Energy is expecting the revenue requirement determination for the upcoming fiscal year by Oil & Gas Regulatory Authority (OGRA) in June. The increase in tariff will come into force from July 1, 2022, The News reported on Sunday citing sources.
According to an official of the Energy Ministry, Sui Southern Gas Company Limited (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL) have faced combined losses to the tune of Rs. 550 billion in recent years. Both companies are facing losses as the system gas tariff has not been increased for some time. SNGPL is facing a loss of Rs. 350 billion whereas SSGC’s losses are around Rs. 200 billion.
According to sources, the system gas tariff will now be derived by OGRA under the amended OGRA law. The IMF has urged the government to ensure that the gas companies do not suffer losses due to the stagnation of the gas tariff and has also asked the government to follow the amended OGRA law in letter and spirit.
It is pertinent to mention here that last week the government increased the prices of petroleum products by Rs. 30 per liter after the IMF made it clear that the bailout deal won’t be revived unless the country ends the subsidies on petroleum products.