Gas Companies Seek Price Hike of Up to 237%

Pakistan’s two gas distribution companies, Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL), have sought to increase gas prices by up to 237 percent in order to generate additional Rs. 660 billion this fiscal year.

In petitions written to Oil & Gas Regulatory Authority (OGRA), Lahore-based SNGPL has asked for a 237 percent increase in tariffs per million British thermal units (mmBtu) while Karachi-based SSGCL has sought a 96 percent hike to fulfill revenue needs for 2022-23.

Following the implementation, SNGPL’s average gas rate will exceed Rs. 1,840 per unit from its current Rs. 546 per mmBtu. Meanwhile, SSGCL’s will be over Rs. 1,360 per unit from Rs. 693 per mmBtu.

Moreover, SNGPL expects a deficit of Rs. 178.814 billion for FY23, including Rs. 445 million for LPG air-mix projects. The entity that distributes natural gas and RLNG to Punjab and Khyber Pakhtunkhwa (KP) has requested a hike of Rs. 448 per unit effective from 1 July.

In addition, it has also added a shortfall worth Rs. 295.268 billion from past years and thus requested an overall raise of Rs. 1,294 per unit. Besides, it has also requested an additional Rs. 1,016 per unit

The company has also requested Rs. 1,016 per unit as the cost of services for RLNG, plus Rs. 762 per mmBtu for the differential impact of diverting RLNG to residential consumers at cheaper winter rates.

Furthermore, SSGCL, which supplies gas to Balochistan and Sindh, expects a revenue gap of Rs. 184.88 billion, including Rs. 34 billion for FY2021-22. It has proposed an Rs. 668 per unit hike from 1 July to cover higher gas and other costs. It also wants Rs. 26.23 per unit for RLNG servicing costs.

Both suppliers argue that the higher income requirement is connected to the price of crude oil and furnace oil, as per government agreements with gas producers.

Therefore, OGRA will hold public hearings in Lahore and Karachi to evaluate SNGPL and SSGCL’s tariff petitions on 15 and 21 November.

Via Dawn

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