SNGPL, SSGC Demands an Increase in gas price to cut losses – Research Snipers

SNGPL, SSGC Demands an Increase in gas price to cut losses

SNGPL and SSGC two government-owned gas companies are facing a loss as there is a massive difference between gas sale prices and its purchase. This in turn is increasing debt. Thus the companies are asking the government to raise the gas prices.

SNGPL is buying natural gas at Rs 629 per million British Thermal Unit (MMBTU) average rate and selling it at Rs399 per unit. The net loss is of Rs230 per unit.

The Managing Director of Sui Southern Gas Company Limited (SSGC) Amin Rajpoot said that if there had been timely gas price increases, the gas companies wouldn’t have faced issues. While briefing the committee he said that the company has to receive Rs50 billion under tax refunds. SSGC has Rs55 billion receivables against Pakistan Steel Mills, Rs80 billion against K-Electric and Rs28 billion against the consumers.

Mr. Rajpoot further informed that gas companies had to make payments to the foreign gas producers but the company was unable to recover money from its customers. He added that gas utilities did not clear the dues to government-owned gas producers including OGDCL and PPL.

Read also: SNGPL will supply uninterrupted gas supply in 2018

Managing director of Sui Northern Gas Company Limited (SNGPL) Amjad Latif said that the Water and Power Development Authority, and the industrial sector owes SNGPL Rs5.5 billion and Rs7.68 billion respectively.

Amjad Latif said, “We are buying costly gas while selling to consumers at cheap rates. For the last five years, gas prices have not been increased so the hardships for the company are increasing.”

Member Finance of Oil and Gas Regulatory Authority (OGRA) said that OGRA does not make decisions, it can only give recommendations to the government and government makes political decisions. He said that the new government has been advised by OGRA to increase the gas prices but the ultimate decision is in the hands of PTI.

Senator Dr. Sikandar Mandhro, Syed Muzaffar Hussain Shah, Bahramand Khan Tangi, Kauda Babar, Member Planning Commission, MD SNGPL, acting MD SSGP, Power Division and OGRA representatives attended the meeting.