Ogra Proposes Decrease In Sui Gas Prices

Ogra has suggested a 10% decrease in the average gas price for SNGPL and a 4% decrease for SSGC.

Ogra Proposes Decrease In Sui Gas Prices

The Oil and Gas Regulatory Authority (Ogra) proposed lowering gas prices for fiscal year 2024–25 on Tuesday. 

The development comes after evaluating revenue requirements for the coming year, which differ from the expectations of Sui Northern and Southern gas firms. 

Ogra proposed a 10% drop in the average gas price for Sui Northern Gas Pipelines Limited (SNGPL) and a 4% decrease for Sui Southern Gas Company (SSGC). Ogra recommended decreasing SNGPL's gas price from Rs179.17 per metric million British thermal units (mmbtu) to Rs1,635.90 per mmbtu. For SSGC, the proposed reduction was Rs59.23 per mmbtu, lowering the average price to Rs1,401.25 per mmbtu. 

The Ogra spokesperson stated that the regulatory authority has presented its recommendations to the federal government for approval.

This idea is in striking contrast to the requests from the gas companies. On March 18, SNGPL requested a 147% rise in gas pricing from Ogra, totaling Rs 2,646.18 per mmbtu, bringing the new average to Rs 4,446.89 per mmbtu. This proposal was made to meet an expected income deficit of Rs189.18 billion, and it was set to take effect on July 1.

Similarly, SSGC urged a price hike of Rs 274.40 per mmbtu. This proposal was made on March 17, shortly after the caretaker administration approved a price increase in accordance with International Monetary Fund (IMF) demands. The caretaker administration approved a 67% hike in natural gas tariffs, beginning February 1, to fulfill the IMF's February 15, 2024, deadline for hiking gas prices under structural benchmark criteria. 

With an expected revenue gap of Rs79.63 billion, the SSGC had recommended that Ogra set the average gas price at Rs1,740.80 per mmbtu.