The decision was sent to the federal government for notification of consumer gas prices
ISLAMABAD:
The Oil and Gas Regulatory Authority (OGRA) on Monday reduced gas prices by up to 8 percent for consumers of Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC), in line with revenue requirements for the financial year 2025-26.
The regulator also passed on Rs60 billion to consumers to compensate for earlier adjustments and gas’s circular debt stock.
Following a federal cabinet decision dated July 1, 2024, it adjusted Rs 13,565 million for SNGPL and Rs 47,315 million for SSGCL against previous deficits and existing circular debt. The decision was sent to the federal government for notification of consumer gas prices, which involve cross-subsidies between categories.
In a statement, OGRA said it had carefully considered the revenue requirements of SNGPL and SSGCL and rationalized the demand by optimizing costs as well as revenues.
The regulator added that the impact of delayed cargoes in the case of Pakistan LNG Limited has been included for the benefit of gas consumers.
Accordingly, the average prescribed price for the financial year 2025-26 has been provisionally determined at Rs 1,804.08 per MMBTU for SNGPL and Rs 1,549.41 per MMBTU for SSGCL, reflecting reductions of 3 per cent and 8 per cent, respectively, from the current prescribed rates.
OGRA said these measures are consistent with its mandate to protect consumer interests and promote fiscal discipline.
“Through the above determination, the Federal Government has been sought for advice on categorical selling prices. Any revision, as advised by the Federal Government, will be notified accordingly by the OGRA. Until such time, the existing categorical selling prices of natural gas will continue to prevail,” the statement added.
Earlier, SNGPL had requested an average price increase of 28.62 per cent, or the equivalent of Rs 505.64 per MMBTU, while SSGC had requested an increase of 21.82 per cent, or Rs 361.87 per MMBTU, for the financial year 2025-26.
The two companies cited a combined deficit of more than 77 billion rupees to cover rising costs and inefficiency in the system.
SNGPL projects a revenue shortfall of Rs 52.958 billion for the financial year, citing higher imported RLNG costs, operating expenses and depreciation. It had sought a total increase of Rs505.64 per MMBTU, with Rs189 per MMBTU for indigenous gas supply and Rs316.64 per MMBTU for RLNG service costs.
This would have increased the average price prescribed by SNGPL to Rs 2,272.14 per MMBTU, including an increase in local supply to Rs 1,955.50 per MMBTU from the current Rs 1,766.50.
SSGC forecast a deficit of Rs24.049 billion, attributing the demand mainly to rising gas purchase costs, depreciation and finance charges.
It had sought an average increase of Rs 361.87 per MMBTU, which includes Rs 125.41 per MMBTU for local gas, Rs 178.59 per MMBTU to meet past deficits and Rs 57.87 per MMBTU for cost of RLNG services.
This would have increased the prescribed average price of SSGC to Rs 2,020.42 per MMBTU from the existing Rs 1,658.55.
