SSGC’s request for gas price hike

SSGC’s request for gas price hike


Sui Southern Gas Company Limited (SSGC) has requested a 157.50 per cent increase in the average price of gas from OGRA. This request has fuelled apprehensions that the government is pursuing a policy of charging consumers for its negligence and mismanagement.
A few days ago, Finance Advisor Shaukat Tareen said in a TV interview that the government’s failure to take timely action has led to gas crisis in the country. Gas is becoming more expensive in the international market due to increasing global demand. Experts believe that global gas prices are likely to fall in December-January. Govern-ment’s projections regarding the gas crisis are questionable in the backdrop of the NEPRA report, non-use of LNG terminals as per capacity, delayed tendering, the gas pipeline and not starting work on new terminal. Imported-gas terminals are built on ships called Floating Storage and Registration Unit (FSRU). Imported LNG is monopolized by Sui Southern Gas Company and Sui Northern Gas Company. The private sector is not allowed to import the gas. These companies import cheap LNG and sell it to the public at high prices. If the private sector is also allowed, competition will increase and imported gas will be provided at a lower price. Since the beginning of LNG imports, there have been occasional crises due to mismanagement. The monopoly of SSGC and SNGPL has created a crisis. Private investors, while talking about the solution to this problem, say that they should be facilitated in this regard.
Since domestic gas production is not enough to meet national needs, imp-orted gas is added to the system. While imported gas has been the subject of controversy since the PML-N era, allegations of corruption and mismanagement are also frequently heard. The gas crisis in Pakistan has been feared to intensify in the winter for two or three months. The cause of the gas crisis has been exacerbated by disputes over the sector, as well as delays in quick decisions. One thing is clear: the reason for the gas crisis is lack of long-term planning and lack of immediate decision making. An important use of natural gas is for the manufacture of fertilizers. The recent government’s decision to divert gas to the energy sector and address its shortages for urea manufacturing and other sectors could have serious implications for the agricultural sector. Urea fertilizer is a very important input in cotton, wheat and practically every crop grown in Pakistan. There is currently no alternative for farmers. If ample gas is not supplied, the urea manufacturing sector cannot function. If we had to use alternative fuels instead of gas, then the competition in the international market would decrease while production cost of products will rise. The government should take immediate steps to save industries and agriculture. As far as raising prices is concerned, it seems that the shortage of gas is being reported only for the purpose of extracting more money from the pockets of the people. So, the SSGPL’s request seems not only strange but also naïve in the sense that consumers may be further marginalized by this phenomenal gas price hike.