According to newspaper reports, the Oil and Gas Regulatory Authority has given another shock to the gas consumers by suggesting increase in the tariff by 36 percent across the country. As a result, the Sui Northern Gas Pipeline Limited will increase its tariff by Rs 57.89 per mmbtu to collect Rs 341 billion or $3.26 billion additional revenues from end consumers during the current financial year. However, the rates for Sui Southern Gas Company Limited will be decreased by Rs 65.12 per mmbtu. Experts believe the government would maintain higher gas prices across the country and consumers of Sui Southern Gas Company could also be ready for an increase in gas prices despite the current tariff reduction. The provinces will receive the differential in prices between prescribed and notified in the form of gas development surcharge. At a time, the oil prices have slumped by more than 50 percent in the international market, the upward revision of gas tariff by the authorities is seen as unprecedented decision as the natural gas rates are traditionally linked with the crude oil prices in the world market. However, it is equally strange that the tariff of one gas company has been increased and the other’s is decreased.
An advice has been sent to the Ministry of Petroleum and Natural Resources seeking a reply by November 15 to increase the tariff which is like to affect domestic and commercial consumers. The government is collecting another Rs 9 billion or $86 million from the consumers under the heads of expenditure it will bear on various gas schemes, including 5,500-kilometre schemes the prime minister has approved for parliamentarians.The authority has approved operating income of the Sui Northern at Rs 201 billion and operating expenditure at Rs 161 billion while operating profit has been fixed at Rs225 billion for the current fiscal year.At least Rs175 billion have been approved as operating income and Rs140 billion as operating expenditure for the Sui Southern in addition to an operating profit of Rs35.4 billion. The government is moving to increase the gas prices at a time when cost of doing business is already high and exports are nose-diving. The country is facing hostile situation on the borders and India is trying its best to isolate Pakistan not only diplomatically, but also commercially.
The country is in dire need of a stimulation plan to increase exports as well as local and foreign investment, but the situation is going from bad to worse. Finance Minister Ishaq Dar has been appreciated for economic policies, which seemed to an eye-wash due to the situation on the ground.
