The decision has been sent to the federal government to notify consumer gas prices.
ISLAMABAD:
The Oil and Gas Regulatory Authority (OGRA) on Monday cut gas prices by up to 8 per cent 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 has also transferred Rs 60 billion to consumers to offset previous adjustments and the stock of gas circular debt.
Following a federal cabinet decision on July 1, 2024, it adjusted Rs 13,565 crore for SNGPL and Rs 47,315 crore for SSGCL against earlier deficits and existing circular debt. The decision was sent to the federal government to notify consumer gas prices, which involve cross-subsidies between categories.
In a statement, OGRA said it has carefully reviewed the revenue requirements of SNGPL and SSGCL and rationalized the demand by optimizing costs and revenues.
The regulator added that the impact of deferred charging in the case of Pakistan LNG Limited has been included for the benefit of gas consumers.
Accordingly, the average prescribed price for FY 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, on the current prescribed rates.
OGRA said the measures are in line with its mandate to protect consumer interests and promote fiscal discipline.
“Through the above determination, advice has been sought from the Federal Government on the category-wise sales prices. Any revision, as advised by the Federal Government, will be notified accordingly by the OGRA. Until such time, the existing category-wise sales prices of natural gas will continue to prevail,” the statement added.
Earlier, SNGPL had sought an average price hike of 28.62 per cent, equivalent to Rs 505.64 per MMBTU, while SSGC had sought an increase of 21.82 per cent, or Rs 361.87 per MMBTU, for FY 2025-26.
Both companies cited a combined shortfall of more than 77 billion rupees to cover rising costs and inefficiencies in the system.
SNGPL projected a revenue shortfall of Rs 52,958 crore for the fiscal year, citing higher RLNG import costs, operating expenses and depreciation. It had sought a total increase of Rs 505.64 per MMBTU, with Rs 189 per MMBTU for indigenous gas supply and Rs 316.64 per MMBTU for RLNG service costs.
This would have raised SNGPL’s prescribed average price to Rs 2,272.14 per MMBTU, including an increase for local supply to Rs 1,955.50 per MMBTU from the current Rs 1,766.50.
SSGC projected a deficit of Rs 24,049 crore, 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 indigenous gas, Rs 178.59 per MMBTU to recover past shortfalls and Rs 57.87 per MMBTU as cost of RLNG services.
This would have raised SSGC’s prescribed average price to Rs 2,020.42 per MMBTU from the existing Rs 1,658.55.
