The proposed gas price adjustment for revival of profitability of the two gas companies has been estimated to eat up about Rs30 billion Gas Development Surcharge (GDS) of the provinces and increase consumer tariff by about 30 per cent.
According to sources, a meeting presided over by finance ministry’s adviser Rana Asad Amin was informed by the petroleum ministry a couple of days ago that change in pricing mechanism would not put additional burden on the general public as the rates for lowest slabs of residential consumers would be either kept unchanged or increased nominally.
In private discussions, however, these officials said a detailed working by the Oil and Gas Regulatory Authority (Ogra) and the Ministry of Petroleum and Natural Resources suggested that the change in bulk-retail ratio would cut down unaccounted for gas (UFG) losses by about three per cent.
As a consequence, the average UFG of the two gas companies would come down from about 12pc at present to about 7pc. On the other hand, the Ogra benchmark of allowing 4.5pc UFG to gas companies in tariff would practically go up to 9.5pc or 10pc. One per cent UFG translates into Rs3bn.
