The Oil and Gas Regulatory Authority (Ogra) is set to hold a public hearing in Lahore regarding Sui Northern Gas Pipeline Limited’s (SNGPL) request for a significant 147% gas price increase for FY 2024-25. Approval of this request, marking the third such increase within a year, could significantly raise inflation and burden economically disadvantaged groups.
SNGPL serves over 7.22 million customers in areas including Punjab and Khyber Pakhtunkhwa and anticipates a Rs189.18 billion revenue shortfall. The price adjustment, aimed for July 1, 2024, would elevate the average gas price to Rs4,446.89 per MMBtu, an increase of Rs2,646.18 per MMBtu. This would cover previous shortfalls and include the regasified liquefied natural gas (RLNG) cost at Rs325.08 per MMBtu.
Ogra plans another hearing in Peshawar on March 27 to gather stakeholder feedback. Decisions will follow these hearings. Earlier, Ogra addressed a Sui Southern Gas Company (SSGC) petition for a Rs274.40/mmbtu increase, citing a Rs79.63 billion shortfall, aiming to set the mmbtu price at Rs1,740.80.
Through the All Pakistan Textile Mills Association (Aptma) and Lahore Chambers, the textile industry opposes SNGPL’s proposal, challenging assumptions on RLNG diversion and projected costs, including a Rs702.411 billion subsidy. They also criticize SNGPL’s 12% unaccounted-for gas (UFG) rate and a proposed Rs298 billion diversion cost, suggesting expansions would increase domestic consumption and service costs. The industry queries the justification for substantial operating expenses, late payment surcharges, working capital costs, and capital and revenue expenses for UFG control amid rising domestic sector consumption and high UFG rates.
