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The Oil and Gas Regulatory Authority (OGRA), in a notification issued on Wednesday, allowed the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC) to raise their tariffs by 74.42 percent and 67.75 percent, respectively.
According to the notification, which detailed OGRA’s decision on both companies’ petition to raise natural gas prices for consumers, the SNGPL—which operates the network in Punjab and Khyber-Pakhtunkhwa—has been permitted to raise its price by Rs. 406.28/Metric Million British Thermal Unit (mmBtu), while SSGC—operating the network in Sindh and Balochistan—has been permitted to raise its average rate by Rs. 469.28/mmBtu, effective from July 2022.
Following the increase, the average price for SNGPL consumers would increase from Rs. 545.89/mmBtu to Rs. 952.17/mmBtu, while the rates for SSGC consumers would increase from Rs. 692.63/mmBtu to Rs. 1,161.91/mmBtu. In their petitions, SNGPL had sought an increase of Rs. 1,294.02/mmBtu, while SSGC had demanded a hike of Rs. 667.44/mmBtu.
In its notification, OGRA has ended differential in prices for various slabs of consumers, setting a uniform rate for all categories of consumers—whether domestic, commercial, industrial, or otherwise. However, as the lowest price was being charged to domestic users, some of them would see the biggest hike, tripling their old rates. Meanwhile, the two highest slabs for SNGPL consumers would actually receive a discount under the new rates.
OGRA has already forwarded the decision to the federal government, which must respond within 40 days. If there is no response from the government, the decision would automatically come into effect. “The federal government shall ensure that the sale prices so advised are not less than the revenue requirement determined by the authority,” read the notification.
According to the petition filed by SNGPL, it had projected a revenue shortfall of Rs. 178.814 billion for the ongoing fiscal year—apart from its Rs. 295.268 billion circular debt. OGRA’s determination, however, said the shortfall would be Rs. 109.18 billion.