In recent news, two major gas companies in Pakistan, Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC), are making headlines for their ambitious plans. These companies are gearing up to collect a staggering Rs. 697 billion from consumers during the current fiscal year 2023-24. A significant part of this revenue collection will be shouldered by consumers, with fixed gas meter rent expected to surge to Rs. 2,000 per month for non-protected customers, a massive increase from the previous rate of Rs. 460 per month.

A Balancing Act to Avoid Last Year’s Losses

To understand the gravity of this financial maneuver, we must delve into the reasons behind it. Both SNGPL and SSGC are looking to avoid a repeat of the staggering losses they experienced in the previous year. Well-informed sources have revealed that the companies have independently estimated their revenues for this year at Rs. 358 billion and Rs. 339 billion, respectively.

Out of the substantial sum of Rs. 697 billion, a whopping Rs. 657 billion will be directed towards covering the cost of gas procurement. This daunting expense poses a significant challenge for the gas companies, and to offset their mounting operational costs, they are considering a proposal to increase gas rates by 100 percent. If this proposal fails to materialize, the dire consequence would be a combined loss of Rs. 395 billion for the gas companies, sources have added.

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An Ongoing Financial Crisis

The looming financial crisis follows a troubling precedent. In the previous year, both SNGPL and SSGC suffered a massive loss of Rs. 245 billion due to the non-implementation of higher gas rates. The impact of this loss was felt not only by the companies but also by consumers across the board.

If approved, the impact of the 100 percent rate hike will be significant. Fixed charges for non-protected customers are expected to soar from a nominal Rs. 460 to a substantially higher Rs. 2,000. Additionally, the proposed increase in gas prices for domestic consumers is set to take effect in the next billing cycle. This move has ignited a heated debate among consumers and policymakers alike.

The Ongoing Debate

The decision by the gas companies to significantly increase rates has raised numerous concerns. It is expected to lead to an increased financial burden on households and businesses across the country. This impending financial strain is not limited to any specific group but will be felt by all. The coming months will reveal the true extent of the consequences as discussions on the proposed price hike continue and consumers brace for their escalating gas bills.

In conclusion, the gas companies’ ambitious plan to collect Rs. 697 billion during the current fiscal year is a reflection of the financial challenges they face. While the proposal to increase gas rates by 100 percent may help them avoid substantial losses, it also carries the risk of burdening consumers. The situation calls for a delicate balance between the financial stability of the gas companies and the affordability of gas for the people of Pakistan.


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