ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) has recommended a significant increase in gas prices for both Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), effective January 1, 2025, ostensibly to fulfill a key condition set by the International Monetary Fund (IMF) under its loan program.
According to the OGRA decision, the authority (OGRA) has calculated an 8.71% increase in the average gas price for SNGPL and a 25.78% hike for SSGCL, against their respective demands of 10.67% and an unprecedented 208.67%.
If approved, these adjustments will raise the average price for SNGPL consumers to Rs1,778.35 per MMBTU, while for SSGCL, it will increase to Rs1,762.51 per MMBTU.
The regulatory authority (OGRA) clarified that the revised prices have been forwarded to the federal government for final approval. The implementation of the price hike will depend on the government’s advice, as outlined under Section 8(3) of the OGRA Ordinance, 2002.
According to industry sources, the proposed tariff adjustment is aligned with an explicit IMF demand, which aimed to ensure timely notification of gas prices under the loan program’s compliance requirements. OGRA’s determination, made under Section 8(2) of its ordinance, underscores the importance of aligning fiscal measures with IMF conditions to secure funding.
OGRA’s decision follows a public hearing held last month, where gas companies presented their revenue requirements for fiscal year 2024-25.
SNGPL and SSGCL had originally sought a substantial hike, with SSGCL demanding a staggering 208.67% increase. However, OGRA moderated the requested hikes based on revenue assessments and broader economic considerations.
It is pertinent to mention that the recommendation comes as citizens already struggle with escalating utility bills during the winter season. The proposed hikes are likely to intensify financial pressures on consumers, particularly in colder regions where gas demand peaks during winter months.
OGRA emphasized that its decision to revise the Estimated Revenue Requirements (RERR) for SNGPL and SSGCL has been forwarded to the federal government, which will provide category-wise natural gas sale price advice. If approved, the new prices will take effect from January 1, 2025.
The proposed tariff adjustment reflects the challenges faced by Pakistan’s energy sector, balancing IMF conditions, operational costs of gas companies, and public affordability. It also highlights the critical role of federal government decisions in determining final pricing outcomes.
The regulatory authority’s notification, issued on December 17, 2024, underscores the necessity of aligning energy pricing with both fiscal and operational realities while ensuring compliance with international financial obligations.
