ISLAMABAD: The Oil & Gas Regulatory Authority (OGRA) has recommended an increase of up to 26% in gas tariffs to generate approximately Rs847.33 billion during the current fiscal year. The proposal, forwarded to the federal government on Tuesday, aims to recover the full cost of gas and address the growing circular debt in the energy sector.
For Sui Northern Gas Pipelines Limited (SNGPL) consumers in Punjab, Khyber Pakhtunkhwa, and other northern regions, OGRA suggested a price hike of Rs142.45 per million British thermal units (MMBTU), raising the average rate to Rs1,778.35 per unit from the current Rs1,635.90. For Sui Southern Gas Company Limited (SSGCL) consumers in Sindh and Balochistan, the regulator proposed an increase of Rs361 per unit, bringing the rate to Rs1,762.51 per unit from Rs1,401.25.
Key Determinations:
SNGPL Tariffs: 8.71% increase in average price, with Rs50.803 billion allowed for previous year’s revenue shortfall despite no request.
SSGCL Tariffs: 25.78% increase in average price, with Rs48.853 billion allocated against a Rs502.981 billion adjustment request.
System Losses: Allowed 7.37% unaccounted-for gas (UFG) losses for SNGPL and 12.45% for SSGCL.
OGRA emphasized that under amended laws, the federal government must decide category-wise consumer rates while adhering to the overall revenue requirement. Any changes in consumer tariffs could be managed through cross-subsidies among consumer categories or federal budget subsidies.
Additionally, OGRA highlighted the government’s commitment to the International Monetary Fund (IMF) to notify revised gas prices effective February 1, 2025. Failure to provide subsidies or cross-subsidy adjustments will result in a uniform flat rate of Rs1,778.35 for SNGPL and Rs1,762.51 for SSGCL consumers.
The proposal also accounts for revenue shortfalls and system inefficiencies. SNGPL’s revenue requirement was adjusted to Rs527.548 billion against a projected Rs580.744 billion, while SSGCL’s requirement was revised to Rs319.481 billion from Rs401.655 billion.
OGRA clarified that the current category-wise sale prices will remain effective until the federal government finalizes adjustments and issues notifications.
Story by Khaleeq Kiani
