Karachi: GoP’s measures of allowing Sui Northern Gas Pipelines Limited (SNGP) and Sui Southern Gas Company (SSGC) to expand their distribution system by 8,000 km within one year would aggravate the gas shortage in the country.
According to Alfalah Securities Limited, The government has directed SNGP to extend its system by 5,000 km whereas; SSGC would extend its system by 3,000 km in FY12. The financing of this system extension would be done by the additional income generated through increased gas tariff approved by the government under the distribution development head. SNGP would increase its tariff by PKR 5.46 per MMBTU, generating approx. PKR 8.92 billion for the company while, SSGC would increase its tariff structure by PKR 12.62 per MMBTU which would earn the company an additional revenue of PKR 8.48bn. Previously, Ogra had banned the gas extension schemes for FY12 in order to cope up with the intensive gas shortage in the country however; the Parliament forced Ogra to withdraw the ban and approved the extension plan on account of strengthening its vote bank.