OGRA Pushes for 10% Gas Price Cut for SNGPL and 4% for SSGC
— May 21, 2024
ISLAMABAD (AIA) The Oil and Gas Regulatory Authority (OGRA) on Tuesday proposed a reduction in gas prices for Sui Northern and Southern gas companies, following as estimation of revenue requirements for the financial year 2024–25.
In contrast to the gas corporations’ demand, OGRA proposed lowering the average gas price of Sui Northern Gas Pipelines Limited (SNGPL) by 10% and the average gas price of Sui Southern Gas Company (SSGC) by 4%.
OGRA suggested reducing SNGPL’s gas price by Rs 179.17 per metric million British thermal unit (mmbtu) to Rs 1,635.90 mmbtu, and SSGC’s gas price by Rs 59.23 per mmbtu to Rs 1,401.25 per mmbtu. This proposal has been forwarded to the federal government for approval, according to an OGRA spokesperson.
On the other hand, after the SSGC, SNGPL also requested that OGRA jack up the price of gas by 147% on March 18. According to the report, the utility company had requested an increase of Rs 2,646.18 per mmbtu in the gas price and asked that the new average gas price be fixed at Rs 4,446.89 per mmbtu. Facing an estimated revenue shortfall of Rs 189.18 billion, it had requested to implement the enhanced gas price from July 1.
It may be noted that the SSGC had also submitted a request to the regulator for a further hike in gas prices, seeking an increase of Rs 274.40 per mmbtu.
On March 17, a month after the caretakers burdened the masses with a gas price hike on the International Monetary Fund’s (IMF) demand, the SSGC had requested the OGRA to further increase gas prices from July 2024.
The caretaker government had approved a 67% increase in the natural gas tariff with effect from February 1, to meet the deadline of the IMF for hiking gas prices under structural benchmark criteria until February 15, 2024.
Citing an estimated Rs 79.63 billion revenue shortfall, the SSGC had urged the OGRA to set the average price of one mmbtu of gas at Rs 1740.80.