Pakistan approves gas price hikes for Sui companies

Pakistan's Oil & Gas Regulatory Authority (OGRA) has approved an increase in the average prescribed price of gas for the Sui companies' network.

The price for Sui Northern Gas Pipelines Limited (SNGPL) will rise by 8.7%, while Sui Southern Gas Company (SSGC) will see a 25.78% increase.

Analysts say that gas prices are going up to keep the circular debt from getting worse. The gap between the selling price and production cost has caused the circular debt to rise, now reaching PKR 2.5 trillion.

The government is gradually increasing prices as part of its agreement with the International Monetary Fund (IMF) as one of its conditions is to monitor and raise gas and electricity tariffs.

SNGPL proposed average prescribed price for the current fiscal year at PKR 1,810.38 per mmbtu. However, OGRA approved price of PKR 1,778.35 per mmbtu, which is 8.71% higher than the current PKR 1,635.90 per mmbtu.

Meanwhile, SSGC proposed average prescribed price for the current fiscal year at PKR 4,325.24 per mmbtu, with the approved price being PKR 1,762.51 per mmbtu, which is 25.78% higher than the current PKR 1,401.25 per mmbtu.

OGRA approved the revenue requirements for the Sui gas companies for the fiscal year 2025. Based on these figures, the federal government will issue category-wise natural gas sale price advice.

For FY25, the revenue requirement for SNGPL is set at PKR 527.54 billion, significantly lower than the PKR 560.2 billion initially demanded. SSGC's revenue requirement is determined at PKR 319.8 billion, down from the PKR 402 billion requested.

OGRA has requested the federal government to provide guidance on category-wise sale prices, which will be implemented once notified. Until then, the current category-wise natural gas sale prices will remain in effect.