Gas prices may surge in Pakistan as utilities push for major hike

Gas consumers across Pakistan may face a significant increase in tariffs as two state-run utilities have filed requests to raise prices effective July 1, citing massive financial shortfalls.

Sui Southern Gas Company (SSGC) has sought a sharp increase in gas prices, requesting an average hike of up to PKR 5,306 per MMBTU. The company has proposed setting the average gas price at PKR 6,855 per MMBTU for the upcoming fiscal year.

The utility estimates a total revenue requirement of PKR 1,279 billion, including PKR 956 billion to cover overall costs. This includes PKR 411 billion for the upcoming fiscal year’s shortfall and PKR 545 billion to recover previous deficits. Additionally, SSGC has requested PKR 42 billion under LNG service costs.

Meanwhile, Sui Northern Gas Pipelines Limited (SNGPL) has also submitted a petition to the regulator seeking an increase of PKR 29 per MMBTU in gas prices. The company has proposed an average prescribed price of PKR 1,784.50 per MMBTU.

SNGPL estimates a revenue shortfall of PKR 8.73 billion for the next fiscal year, along with a substantial PKR 585 billion deficit from previous years. The company has also requested PKR 67.67 billion under LNG service costs and proposed an additional PKR 376.33 per MMBTU charge for LNG services.

Overall, gas companies have projected a combined financial shortfall of approximately PKR 1,650 billion.

The Oil and Gas Regulatory Authority (OGRA) is scheduled to hold hearings on SNGPL’s petition on April 21, while SSGC’s request will be heard on April 22.