After SSGC, SNGPL also seeks up to 147% hike in gas tariff

ISLAMABAD: In a move that could add a financial burden to the inflation-hit consumers, Sui Northern Gas Pipelines Limited (SNGPL) has sought approval from the Oil and Gas Regulatory Authority (OGRA) to increase gas prices by 147%.

As per details, after Sindh and Balochistan, preparations are in full swing to increase the gas prices for Punjab and Khyber Pakhtunkhwa as the SNGPL has requested a price increase of Rs 2,646.18 per Million British Thermal Unit (mmbtu) and requested to set a new average price of Rs 4446.89, which would multiply the burden on the people already grappling with soaring rates.

Sui Northern has estimated a revenue shortfall of Rs 189 billion and 18 crore. The OGRA will hear the SNGPL’s application on March 25 in Lahore and March 27 in Peshawar.

If SNGPL’s request is approved, the increase in gas price will be applicable from July 2024.

It may be noted here that Sui Southern Gas Company has also sent a request to OGRA for an increase of Rs 274.40/mmbtu in gas prices from July 1, 2024, and to fix the average gas price of Rs 1740.80/mmbtu which is expected to burden consumers by Rs 79 billion and 63 crores.

The SSGC has estimated a total revenue shortfall of Rs 79 billion and 63 crore rupees in the application for the next financial year, of which Rs 56 billion and 69 crore are due to local gas and Rs 22 billion and 93 crore due to RLNG. 

OGRA conducted a hearing on Monday on Sui Southern’s application to jack up the gas prices for its consumers by 18.71% in Karachi while OGRA will also conduct a hearing on March 20 in Quetta.

In two separate petitions filed by both the Sui companies (SNGPL & SSGCL) with the OGRA for the determination of Estimated Revenue Requirement/Prescribed Prices for FY2024-25, the SNGPL and SSGCL have also sought the transfer of RLNG cost of service at Rs 325.08 per mmbtu and Rs 39.56 per mmbtu, re­spectively, for FY2024-25. 

The revenue requirement of the petitioners will en­able the company to meet the cost of gas, operating costs and return on assets.

After the hearing by OGRA, the decision will be sent to the federal government, and after the approval of the federal government, OGRA will issue a notification to increase gas prices.

The proposed price hike, if sanctioned by OGRA, would substantially elevate the cost of natural gas, intensifying the economic challenges faced by households and businesses across the country. With inflation already at alarming levels, this development is likely to further burden citizens who are already struggling to make ends meet.