Ogra okays up to 75% increase in Gas prices

By Ali Imran

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Wednesday allowed two gas companies — Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) — to hike their prices by 74.42pc and 75.35pc, respectively.
In its decision on the two companies’ petitions, Ogra allowed SNGPL to raise its average prescribed gas prices for the current fiscal year by Rs406.28/mmBtu and SSGCL to increase its average prescribed gas rates by Rs499.28/mmBtu.
The two companies had asked the regulator for a hike of Rs1,294.02/mmBtu and Rs667.44/mmBtu, respectively, effec-tive from July 2022.
Previously, the average prescribed gas price for SNGPL consumers was Rs545.89/mmBtu, which would now be Rs952.17/mmBtu. Similarly, the average prescribed gas price for SSGCL consumers was raised from Rs662.63/mmBtu to Rs1,161.91/mmBtu.
Ogra also fixed a uniform rate for all categories of consumers, including domestic, tandoors, commercial, general in-dustries and export-oriented industries. However, the hike in tariff will affect domestic consumers the most, with some seeing their rates triple.
Ogra’s decision has been forwarded to the federal government which is bound to advise the regulatory authority within 40 days on the minimum charges and the sale price for each category of retail consumers for notification in the official gazette.
“The federal government shall ensure that the sale prices so advised are not less than the revenue

requirement [of the companies] determined by the authority,” Ogra said in the decision.

In case the federal government did not advise within 40 days, the prices worked out by Ogra would be notified, it fur-ther stated.
In its petition, SNGPL had projected a revenue shortfall of Rs178.814 billion for the current fiscal year as well as Rs295.268bn in previous years and requested the regulator to raise prices by Rs1,294.02/mmBtu. It had cited liquefied natural gas air-mix project, differential impact of RLNG diversion and UFG (unaccounted for gas) adjustments.

However, Ogra worked out the company’s revenue shortfall in FY23 at Rs109.180bn at the applicable natural gas sale price. It determined the company’s revenue requirement to be Rs306.245bn for the current fiscal year.

Separately, the regulator determined SSGCL’s revenue requirement in FY23 at Rs327.227bn.

Last year, Ogra had determined a 45pc increase in the prescribed prices of natural gas for the 2022-23 fiscal year to meet SNGPL and SSGCL’s revenue requirements.
It had forwarded the determinations to the federal government for advice on gas sales price for each category of con-sumers. However, the federal government has not responded to the previous determinations.