High Gas Rates Stir Controversy in Karachi’s Industrial Sector; Accusations Against SSGC

High Gas Rates Stir Controversy in Karachi's Industrial Sector; Accusations Against SSGC

Sabiha Rajpoot | December 19, 2023 | 07:14 PM IST | Energy, Pakistan News | Follow on Google News

High Gas Rates Stir Controversy in Karachi’s Industrial Sector; Accusations Against SSGC Image/Dawn

High Gas Rates Stir Controversy in Karachi’s Industrial Sector; Accusations Against SSGC

The industrial sector in Karachi has raised strong objections against Sui Southern Gas Company (SSGC), accusing it of burdening them with expensive Liquified Natural Gas (LNG) without the authority to set rates. The accusations unfolded during a public hearing held by the Oil & Gas Regulatory Authority (Ogra) regarding the review of SSGC’s estimated revenue requirements for FY2023-24.

Industrialists claimed that SSGC increased LNG prices without the mandate to fix rates and alleged that the company was passing on Unaccounted-For Gas (UFG) losses from Balochistan to industries in Sindh.

SSGC CEO’s Defense

SSGC CEO, Imran Maniar, defended the company’s stance, stating that they couldn’t sell LNG purchased at a high international market price at lower rates. He emphasized the impracticality of providing LNG to industries at domestic rates, given the disparity between domestic gas tariff and LNG prices.

Maniar even posed a question to the industrialists, asking if SSGC could halt gas supply if the industries didn’t require LNG. He clarified that the company had procured spot cargoes at a higher price than domestic gas due to the prevailing market conditions.

Industry Concerns and Ogra’s Response

Prominent businessman Zubair Motiwala highlighted the adverse impact on industries, urging Ogra to address the challenges arising from cross-subsidies to other sectors. Other industry representatives expressed concerns over rising gas prices and the proposed changes in the energy mix, asserting that such alterations would be detrimental to the industrial sector.

Ogra Chairman Masroor Khan acknowledged the depleting domestic gas reserves and the cost implications of imported gas. He stressed that the decision on the blend of imported and domestic gas lies with SSGC.

Industry, Gas, Karachi, SSGC, LNG, Rates, Ogra, Controversy, Industrialists, UFG, Imran Maniar, Energy Mix, Balochistan, Revenue Shortfall, Gas Tariff, Ogra Hearing.

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Sabiha Rajpoot

Sabiha Rajpoot, a young journalist, having BA- Journalism degree, writes on different scenarios. Sabiha is also a doctor degree at DHMS.