November 22, 2008	Saturday	Ziqa'ad 23, 1429

ISLAMABAD, Nov 21: The Oil and Gas Regulatory Authority approved on Friday an increase of Rs20.56 and Rs18.55 per million million British thermal unit (mmbtu) in prices of gas supplied by the SNGPL and SSGCL, respectively.

The move comes ahead of the peak consumption season (December-March).

Only a week ago, the government had reduced prices of some petroleum products following a sharp decline in international crude prices.

As gas prices are linked with those of petroleum products, it was expected that the government would announce a reduction in the prices of Compressed Natural Gas (CNG) and gas.

However, Ogra officials said they had approved a 7.67 per cent increase in the price of gas supplied by the Sui Northern Gas and 7.83 per cent in that of Sui Southern Gas.

Ogra’s Member (Finance) M.H. Asif said the SNGPL had demanded Rs97.62 per mmbtu increase in its rates effective from December or Rs112.70 per mmbtu with effect from January.

This was an increase of 40 per cent on the existing average price of Rs287.19 a unit.

But, he said, Ogra had slashed the demanded hike by 82 per cent, revising the price upwards only “by Rs20.56 per mmbtu”.

The SSGCL, he said, had petitioned for an increase of Rs97.73 per mmbtu from December or Rs114.01 per mmbtu from January. But, Ogra had reduced it to Rs18.55 per mmbtu effective from January.

He said the SNGPL had claimed a shortfall of Rs36 billion in its revenue, which had been reduced to Rs7 billion by Ogra. In case of SSGCL, the claimed shortfall was Rs22 billion, which has now been reduced to Rs4 billion.

“Ogra has taken an optimistic view of the situation by estimating the average US dollar exchange rate during January to June 2009 at Rs75. The companies had based their projections on a dollar-rupee parity of between Rs82 and 83.17,” an official said. He said Ogra had also taken into account the fall in international oil prices.

Ogra also rejected the companies’ demand to compute well-head price of gas purchase from the Qadirpur gas field at Rs357 per unit and calculated it at Rs161.02 per unit on the basis of its previous notification.

The increase approved by Ogra has been forwarded to the petroleum ministry for approval by the prime minister.