By SKM
January 06, 2024
ISLAMABAD: The gas circular debt is feared to further swell by Rs200 billion to Rs2900 billion as the RLNG diversion to the domestic sector has increased up to 450mmcfd in January 2025 in Punjab and KPK.
The LNG diversion in December, 2024 was at 250mmcfd in December 2024. However, according to the relevant authorities, the current average domestic tariff stands at Rs1,250 per MMBTU whereas the RLNG tariff stands at Rs3,600 per MMBTU. The delta of loss of Rs2,350 per MMBTU would appear in the circular debt.
They told Exclusivewaves.com.pk that the estimated loss to be incurred on account of RLNG diversion to the domestic sector from November 2024 to March 2025 has been estimated to be over Rs200 billion which will appear in the gas circular debt. If it is made through the revenue requirement of the gas company, the increase in gas tariff will be exorbitant.
The SNGPL told Exclusivewaves.com.pk that the domestic demand has increased to 950mmcfd out of which 450mmcfd is being supplied to domestic consumers. In December, the domestic sector was provided with RLNG of 250mmcfd. It says that in February 2025, the demand of domestic sector would plummet, so the RLNG diversion in February would also reduce.
The data available also shows that the domestic sector in SNGPL jurisdiction has become the biggest client of RLNG as the domestic sector is being provided 450mmcfd, the power sector 352mmcfd, and the export and non-export industry 200mmcf.
However, the cost of RLNG diversion of Rs260 billion to the domestic sector during the period from FY19 to October 2023 has not been recovered so far and it has become a part of the circular debt of Rs2.7 trillion. Officials said out of Rs2.7 trillion circular debt, Rs1 trillion had been added just because of no increase in gas prices in the last 10 years.
However, Ogra in its latest determination has allowed Sui Northern to charge the consumers Rs8.54 billion in FY25 in the head of the financing cost to keep the RLNG supply chain afloat. Ends
