SNGPL Seeks 137% Hike In Gas Tariff

A public hearing on the SNGPL’s petition is scheduled for December 11.

SNGPL Seeks 137% Hike In Gas Tariff

Sui Northern Gas Pipeline Limited (SNGPL) demanded a 137% increase in average suggested gas pricing, equal to Rs 1,715.49 per MMBTu, to address the impending income gap.

The state-owned company, which provides gas to Punjab and Khyber Pakhtunkhwa, has submitted a formal application to the Oil and Gas Regulatory Authority (Ogra) for the fiscal year 2023–24, requesting that the tariff be reduced to Rs 2,961.98/MMBtu, effective July 1 of the current fiscal year.

According to the company's plea to Ogra, it expects an income demand of Rs179.16 billion for FY24, including Rs697 million for LPG air-mix projects in Gilgit for the current fiscal year.

SNGPL is requesting an increase in the average prescribed gas price of Rs 506.35/MMBTu, commencing July 1, 2023. It has notably added the cost of re-gasified liquefied natural gas (RLNG) redirected to domestic users to the overall cost of gas, following a decision of the federal cabinet on October 10, 2023.

In addition, the company has budgeted Rs427.83 billion to cover shortages from prior years. SNGPL cites the cost of gas, RLNG, and other components stated in their petition to support a 137.6% increase in average recommended rates to Rs 2,961.98/MMBTu beginning July 1, 2023.

Furthermore, SNGPL has assessed the cost of RLNG's service for the current fiscal year at Rs72.16 billion (equal to Rs293.07/MMBTu). The subject petition is being revised, according to the corporation, based on real cost data and sales numbers for July and August 2023, resulting in a reduction of the indigenous gas business shortfall from Rs 181.516 billion to Rs 179.160 billion.

The revised segment deficit and RLNG business cost for FY2023–24 are Rs179.160 billion for indigenous gas businesses and Rs427.830 billion for prior-year shortfalls. According to the appeal, the overall indigenous gas industry gap, including past years' shortfalls, is Rs606.990 billion, with an extra Rs72.160 billion allocated as the RLNG cost of delivery.

Ogra has requested feedback from all parties that are interested or impacted, including gas customers and the general public. A public hearing on the case is planned for December 11, 2023, in Lahore, when the regulatory authority will decide on gas prices.