Ogra proposes trimming gas prices of Sui gas companies

A lit gas burner. — Reuters/File
  • Ogra advises a decrease of Rs179.17 in gas cost.
  • Proposes a Rs59.23 reduction for SSGC gas tariffs.
  • Ogra’s suggestions are awaiting government endorsement.

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has put forth suggestions for lower gas tariffs from the Sui Northern and Southern gas entities, as reported by Geo News on Tuesday.

Deviating from the price increase request by the gas companies, Ogra has recommended a 10% slash in the average gas price for Sui Northern Gas Pipelines Limited (SNGPL) and a 4% cut for Sui Southern Gas Company (SSGC).

The regulatory body proposed a reduction in SNGPL gas fees by Rs179.17 per metric million British thermal unit (mmbtu), bringing it down to Rs1,635.90 mmbtu.

Similarly, it has been proposed that SSGC’s gas price be reduced by Rs59.23 per mmbtu, setting the new average at Rs1,401.25 per mmbtu.

The concluded recommendations have been forwarded to the central government for sanction, stated a spokesperson for Ogra.

In a contrasting move earlier, SSGC and SNGPL had both applied for a 147% increment in gas rates on March 18.

As per the report, SNGPL was seeking to surge the gas price by Rs2,646.18 per mmbtu, aiming for an average fee of Rs4,446.89 per mmbtu.

While grappling with a projected deficiency of Rs189.18 billion, SNGPL sought the proposed price hike to be effective from July 1.

It is noteworthy that SSGC also requested a price elevation, proposing an enhancement of Rs274.40 per mmbtu.

Following a price hike implemented by the caretaker administration on the International Monetary Fund’s (IMF) demand, SSGC petitioned Ogra for an additional price increase starting July 2024, on March 17.

Previously, the caretaker government had sanctioned a 67% surge in natural gas rates beginning February 1, in order to meet the IMF’s deadline for gas price elevation under structural benchmark criteria by February 15, 2024.

Pointing to an expected shortfall of Rs79.63 billion, SSGC proposed that the Ogra establish an average gas price of one mmbtu at Rs1740.80.

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