25.78% gas tariff hike for SNGPL, 8.71% for SSGC proposed

ISLAMABAD: In a further blow to the gas consumers of all categories, the Oil and Gas Regulatory Authority (Ogra) on Tuesday determined an increase in the gas price by 8.71-25.78 per cent across the country, to be effective from January 1, 2025.

The Ogra determined the Review of the Estimated Revenue Requirement (RERR) of the SNGPL and the SSGC for FY2024-25, under which the gas sale price has been increased by 8.71 per cent for consumers in Sindh and Balochistan in the jurisdiction of the SSGC (Sui Southern Gas Company) and 25.78 per cent for consumers in Punjab and KP, falling under the SNGPL.

The regulator has increased the gas sale price by Rs1778.35 per MMBTU for every category consumer of Sui Northern and Rs1762.51 per MMBTU for every consumer of Sui Southern. However, the Ogra has sent its decision to the federal government for advice on category-wise final sale prices. This is the government’s prerogative to keep the price unchanged for the protected consumers or not and divert their burden to high-end consumers. After the decision by the government on how to treat the protected, low-end consumers and high-end consumers, the Ogra would notify accordingly. The new gas sale prices are to be implemented from January 1, 2025.

The regulator has determined the revenue requirement of Sui Southern at Rs527.548 billion for FY 2024-25 and for Sui Northern Rs319.781 billion. If the federal government fails to advise the Authority within the stimulated time of 40 days specified in sub-section (3), for increase in sale price, the category wise prescribed prices so determined by the Authority under sub-section (1) and (2) would automatically be notified.

In its determination, the Ogra mentioned in detail the impact of more RLNG diversion to the domestic sector and that the loss in gas revenue to the Sui Northern would increase. The Authority observed that in case of exclusion of captive power gas supplies, the Sui Northern would be constrained to divert an additional 12,807mmcf RLNG to the system gas consumers with a rollover of five RLNG cargoes of 5836mmcf. The Authority has also noted that local supplies would also be curtailed over January-to-June 2025 tenure due to the surplus volume of RLNG available in the system. If the federal government decides to proceed with disconnection of CPPs effective from January 2025, the SNGPL’s revenue requirement after adjustment of the cushion available would amount to Rs560.161 billion (Rs1746.22 per MMBTU), thus reducing the available cushion to Rs7890 million.