ISLAMABAD: Despite the Oil and Gas Regulatory Authority’s (OGRA) approval to reduce gas prices by up to 10 percent, the government has decided to maintain the current rates, depriving the public of an estimated Rs. 132 billion in relief.
OGRA had proposed a 10pc reduction in gas prices for Sui Northern Gas Pipelines Limited (SNGPL) and a 4% reduction for Sui Southern Gas Company (SSGC) for the financial year 2024-25. However, the federal cabinet’s Economic Coordination Committee (ECC) approved maintaining the existing natural gas sale prices for all consumer categories except for the General Industry (Captive). This category will see a price increase to Rs. 3,000 per Million British Thermal Unit (MMBTU) from Rs. 2,750 per MMBTU, effective July 1, 2024.
According to sources, the government has decided to maintain the gas prices at existing level for all categories of gas consumers except for General Industry (Captive) ostensibly to combat with circular debt.
OGRA, in a statement, said that the Federal Government, under Section 8(3) of the OGRA Ordinance, 2002, has advised to maintain the existing natural gas sale prices for all categories of consumers except for General Industry (Captive).
“The same has been notified by OGRA in the Official Gazette and is also placed on its official website (www.ogra.org.pk). The Federal Government has the sole jurisdiction to fix sale prices for different categories of consumers of natural gas considering its socio-economic agenda & sectoral policies,” said OGRA.
Under Section 8(3) of the OGRA Ordinance, 2002, the Federal Government advised OGRA to keep the existing natural gas sale prices unchanged for most consumers. This directive has been officially notified and posted on OGRA’s website.
According to OGRA’s determination, the average prescribed price for SNGPL was set at Rs 1635.90 per Million British Thermal Units (MMBTU) of gas. This represented a decrease of Rs 179.17 per MMBTU, amounting to a 10% reduction from the previous rates.
Additionally, OGRA addressed the financial shortfall claimed by SNGPL for previous years. SNGPL claimed a shortfall of Rs 862.6 billion in their petition, but OGRA’s calculations have determined the shortfall to be Rs 580.5 billion.
For Sui Southern Gas Company (SSGC), OGRA determined the average prescribed price at Rs 1401.25/MMBTU. This marked a reduction of Rs 59.23/MMBTU, which was a 4% decrease from the previous pricing.
OGRA requested the federal government’s advice on category-wise sale prices, indicating that any revisions will be notified accordingly once the government’s recommendations are received. Until then, the existing category-wise natural gas sale prices would remain in effect. However, ECC on Sunday decided to maintain the existing natural gas sale prices for all categories of consumers except for General Industry (Captive).
