SSGC Warns of Potential Company Crisis if Tariff Hike is Delayed
By
March 19, 2024
SSGC Management Warns of Financial Trouble Without Timely Gas Price Increase
During a recent public hearing by Ogra, SSGC stressed the urgent need for a gas price hike to avoid financial distress. They requested a Rs274.40 per mmBtu increase effective from July 1, 2024, aiming to meet their revenue requirement of Rs359 billion. SSGC cited difficulties in paying for gas purchases in dollars while selling in rupees, resulting in a massive Rs300 billion receivables backlog over two years. Additionally, payables exceeded Rs300 billion, impacting hydrocarbon exploration activities.
The delay in gas price notifications also exacerbated cash flow issues. SSGC urged the government to consider Balochistan’s revenue shortfall when revising gas prices. Meanwhile, industry representatives highlighted concerns about survival amidst rising tariffs. Aptma proposed market deregulation and competitive pricing to foster efficiency and competitiveness. They noted a 223% increase in gas prices since January 2023 and emphasized the need for sustainable energy pricing to maintain industrial growth and competitiveness. Moreover, SSGC faces challenges with unaccounted-for gas rates, significantly higher than global benchmarks, indicating systemic issues.
