Ogra recommends up to 7.14% hike in gas prices

• SSGCL may see prices rise by Rs118.47 mmbtu.
• SNGPL could charge Rs86.3 more per mmbtu.
• Gas utilities ordered to ensure uninterrupted supply.

The Oil and Gas Regulatory Authority (Ogra) has recommended an increase of up to 7.14% in gas prices for the current fiscal year.

Under Ogra’s determination, Sui Southern Gas Company Limited (SSGCL) may see prices rise by Rs118.47 per million British thermal units (mmbtu) to Rs1,777.02 from the existing Rs1,658.55/mmbtu.

Sui Northern Gas Pipeline Limited (SNGPL) could charge Rs86.3 more per mmbtu, pushing its tariff to Rs1,852.80 from the current Rs1,766.50/mmbtu.

Notably, in their petitions filed with Ogra for the fiscal year 2025-26, SNGPL had requested an average gas price hike of 28.62%, or Rs505.64 per mmbtu, while SNGPL sought a 21.82% increase, or Rs361.87 per mmbtu, The News reported on Tuesday.

Both state-owned companies cited a combined shortfall of over Rs77 billion to cover rising costs and system inefficiencies. The SNGPL projected a revenue shortfall of Rs52.958 billion due to higher imported RLNG costs, operating expenses, and depreciation. It proposed a Rs189 per mmbtu increase for indigenous gas and Rs316.64 per mmbtu for RLNG services. 

SSGCL sought Rs125.41 per mmbtu for indigenous gas, Rs178.59 per mmbtu to recover past shortfalls, and Rs57.87 per mmbtu for RLNG costs.

Whereas, Ogra issued a press release that says, “Ogra has carefully reviewed the revenue requirement of SNGPL and SSGCL and rationalised the demand by optimising costs as well as revenues. 

Moreover, the impact of deferred cargoes in the case of Pakistan LNG Limited has been included to the benefit of gas consumers. Accordingly, the average prescribed price for FY2025-26 of SNGPL & SSGCL has been provisionally determined at Rs1,804.08/mmbtu and Rs1,549.41/mmbtu for FY2025-26, thereby reducing the price by 3% and 8% respectively over the current prescribed price in line with its mandate to protect consumers’ interest and promote fiscal discipline. 

The statement read that Ogra, in pursuance of the federal cabinet decision made on July 1, 2024, adjusted Rs13,565 million (Rs48.71 per mmbtu) in case of SNGPL and Rs47,315 million (or Rs227.62 per unit in case of SSGCL against the previous shortfall /stock of gas circular debt.”

The regulator has asked the federal government for advice on category-wise sale prices. Any revision, as advised by the federal government, shall be accordingly notified by Ogra. Till such time, the existing category-wise natural gas sale prices shall continue to prevail.

However, the Oil and Gas Regulatory Authority (OGRA) has clarified that no change in gas prices has been approved under its recent determination.

In a statement issued today, Ogra said certain channels had created an incorrect impression by suggesting that gas tariffs had been revised. 

"No change in gas prices has been approved as per the recent determination," the statement added.

Separately, Minister for Petroleum Ali Pervez Malik directed gas utilities to ensure an uninterrupted supply to consumers during winter.

During a meeting to discuss seasonal gas load management, the minister urged necessary measures to facilitate the public during the winter months.

Malik confirmed that gas companies had been issued the required instructions in this regard.

According to a statement, the managing directors of SNGPL and SSGC briefed the minister on gas availability across the country.

The meeting also reviewed the issuance of RLNG domestic connections, the statement added.

Malik noted that the domestic gas supply this year was "significantly better" compared to last winter.