The Federal Government is likely to increase the gas tariff by around 40-50 percent in order to restore the International Monetary Fund (IMF) $6 billion programme. According to the details, the increase in gas tariff will be implemented from July 1, 2022.
The decision is being taken as the Ministry of Energy is expecting the revenue requirement determination for the upcoming financial year (FY2022-23) by the Oil and Gas Regulatory Authority (OGRA) in mid-June, The News reported on Monday.
The Sui Gas Companies, which include Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC), have faced combined losses of Rs. 550 billion during the last few years. According to the details, SNGPL is facing a loss of Rs. 350 billion, while SSGC is facing losses of Rs. 200 billion.
To rectify the situation, new gas tariffs will now be derived under the new OGRA law as per the directions of the International Monetary Fund (IMF), which has asked the government to ensure that no further losses are reported by the gas companies from the next fiscal year.
Under the amended OGRA law, the Oil and Gas Regulatory Authority (OGRA) will determine the revenue requirement for both companies and accordingly announce the gas tariff, which will be implemented automatically after 40 days if the government does not respond to the determined tariff with any portion of subsidy for various consumers’ categories.
It is pertinent to mention that the government has already announced a massive increase of Rs. 30 per litre in prices of petroleum products in order to restore the International Monetary Fund (IMF) loan programme and stabilize the depreciating currency.