Monday January 30, 2023

OGRA proposes hike in gas tariff for households, tandoors and export-oriented sector

OGRA suggests 74% increase in sui gas prices from July 2022

January 11, 2023
OGRA proposes hike in gas tariff for households, tandoors and export-oriented sector. Representational image.
OGRA proposes hike in gas tariff for households, tandoors and export-oriented sector. Representational image. 

ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) on Wednesday increased the gas tariff for consumers of two Sui Gas companies by up to 74 percent for household consumers, commercial sector, roti tandoors, captive power plants and general industries, including export-oriented sector, effective from July 2022.

Interestingly, the regulator has abolished the earlier applicable slabs of gas consumption and their respective rates and fixed the price at 952.17 per Million British Thermal Unit (MMBTU) for Sui Northern Gas Company Limited (SNGPL) consumers. Likewise, for Sui Southern Gas Company (SSGC), the prescribed prices have been fixed at Rs1161.91/MMBtu.

Having a cursory look at the decision, lower slabs who consume less and are almost poor consumers are most affected as their gas prices have been tripled, while for the higher slabs, the prices have been literally reduced.

The regulator issued its decision after holding public hearings on the petitions of Sui Northern Gas Company Limited (SNGPL) and Sui Southern Gas Company (SSGC) in November 2022, where both companies had demanded a substantial increase in their prescribed gas prices for the current FY23 to help them meet revenue requirements.

SNGPL, operating the gas network in Punjab and Khyber Pakhtunkhwa, sought Rs1,294.02/MMBTU and SSGC that feeds Sindh and Balochistan sought Rs667.44/MMBTU increase.

According to the latest decision of OGRA on their petitions, the prescribed gas prices for SNGPL have been increased by 74.42 percent while for SSGC, it has been increased by 67.75 percent.

In absolute terms, for SNGPL the average price has been increased by Rs406 per million British thermal units (MMBtu) to Rs952.17/MMBtu. For SSGC too, the gas price has been enhanced by Rs469/MMBtu to Rs1,161.95/MMBtu.

The regulator has sent its decision to the federal government. Now, the government would decide on it within 40 days of this notification. If the government does not notify it, then it will automatically come into effect.

For domestic consumers, the prescribed prices for the lowest slab, which was earlier Rs121/MMBtu, has now been increased to 952.17/MMBtu depicting an increase of 687 percent. For the next slab, it has been increased from Rs300/MMBtu to Rs952.17/MMBtu. Interestingly, for the highest two slabs, the prices have been reduced after fixing the rate at Rs952.17. Earlier, the second slab was paying Rs1,107/MMBtu and the last one was paying Rs1,460/MMBtu. Now comparing these prices with the new prices, there is a sizeable reduction in gas price for the rich consumers.

Similarly, for commercial consumers (tandoor), the five slabs have been abolished, and the rate fixed at Rs952.17/MMBtu. Earlier, the tandoors gas tariff was Rs110/MMBtu for the lowest slab and Rs700 for the highest slab.

For the export-oriented sector (general industries), the price has been increased from the existing Rs819 to Rs952.17/MMBtu. From the Captive power plant, the gas price increased from Rs852 to now Rs952.17. Interestingly, prices for CNG, cement and fertilizer sector have been reduced.

For SSGC consumers, the slabs have been abolished and the prices have been fixed at Rs1161.91/MMBtu.