OGRA, SNGPL deny any plans to update gas billing system

Both the Oil and Gas Regulatory Authority (OGRA) and Sui Northern Gas Pipelines Limited (SNGPL) have denied any plans to update the current tiered gas billing system. 

This proposed change would involve eliminating the existing slabs and discounts and transitioning to a flat-rate method.

Some media reports claimed that the federal government may update the current tiered gas billing system by ending slabs and discounts and moving towards a flat-rate method.

According to reports, this change will affect both domestic and industrial consumers equally, as everyone will be charged the same rate regardless of their gas consumption.

Under the new billing system, the price per unit of gas (MMBtu) will be uniform across sectors, including domestic, commercial, general industry, and even export-oriented consumers.

The exact price is yet to be finalized and awaits approval. However, it is expected to be around Rs 4,501 per MMBtu (excluding taxes) for consumers in Punjab, Khyber Pakhtunkhwa, and the federal capital, media reports said.

On the flip side, sources within OGRA and SNGPL have contradicted these claims, stating that the government is in dire need of revenue, and the gas slab system serves as a primary source of income in the energy sector. Therefore, the government is unlikely to take the risk of discontinuing this system.

Additionally, any decision regarding the gas pricing system is approved by the Economic Coordination Committee (ECC) of the Cabinet. Sources said that no such summary has been presented before the ECC.

It is better to recall that the SNGPL recently requested a 147% hike in gas tariffs. The Sui company argued that the gas price needs to be raised to Rs 4,446 per MMBtu to reflect production costs.

Stakeholders of the gas sector also pointed out that existing gas prices have already forced numerous businesses to shut down, although Pakistan sells gas to some customers for as low as $4 per MMBtu while purchasing it internationally for $15 per MMBtu.

The OGRA chairman, in a public hearing, acknowledged the concerns of both consumers and gas companies and indicated that a final decision on gas price revisions will be made after careful consideration.