Ogra proposes gas price hike for North, relief for South

ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) on Tuesday proposed new gas tariffs for FY2025-26, recommending a rise for Sui Northern Gas Pipelines Limited (SNGPL) and a cut for Sui Southern Gas Company Limited (SSGCL), effective July 1, 2025. The decision, now with the federal government, awaits final approval.

The Ogra determined the Review of the Estimated Revenue Requirement (RERR) of the SNGPL and SSGC for FY2024-25, under which the prescribed gas sale price has been increased by 6.57 per cent for consumers in Punjab and Khyber Pakhtunkhwa. While for Sindh and Balochistan in the jurisdiction of SSGC (Sui Southern Gas Company), the price has been reduced by 5.9 percent.

In its decisions announced Tuesday, OGRA proposed a Rs116.90 per MMBTU increase in the prescribed gas price for SNGPL to Rs1,895.25/mmbtu. In contrast, the authority recommended a Rs103.95 per MMBTU reduction for SSGCL to Rs1658.56/mmbtu.

The regulator has determined the revenue requirement of Sui Northern at Rs534.45 billion for FY2025-26 and for Sui Southern Rs354.17 billion. SNGPL has sought a 58 per cent hike in its prescribed gas price to Rs2,803 per MMBTU, citing a Rs207.4 billion revenue shortfall and rising gas costs. It requested a revenue requirement of Rs700.97 billion, but OGRA has allowed Rs534.46 billion, setting the price at Rs1,895.25 per MMBTU for FY2025-26.

The proposed increase in SNGPL’s prescribed price is primarily attributed to the financial burden of RLNG diversion—an outcome of a federal cabinet decision on October 30, 2023. OGRA has raised red flags over the exponential increase in such diversions, calling on SNGPL to initiate urgent consultations with the federal government to review gas supply management in light of sectoral energy demands, global contractual obligations, and economic realities.

SSGCL had requested a 135pc increase in its prescribed gas price to Rs4,137.49 per MMBTU, up from Rs1,762.51, citing a cumulative revenue shortfall of Rs498.76 billion, including past recoveries. A summary of the proposed revisions has been sent to the federal government for final approval. Once endorsed, OGRA will issue a formal notification, and new rates will be implemented accordingly.