Regulator proposes hike in SNGPL gas tariff, cut for SSGCL from July

Pakistan's Oil and Gas Regulatory Authority (OGRA) has proposed a PKR 116.90 per million British thermal unit (MMBTU) or 6.57% increase in the prescribed gas price for consumers of Sui Northern Gas Pipelines Limited (SNGPL), effective from July 1.

Meanwhile, it has recommended a reduction of PKR 103.95 per MMBTU or 5.90% for Sui Southern Gas Company Limited (SSGCL).

The recommendations were made in two separate decisions issued Tuesday, in which OGRA finalized the Estimated Revenue Requirements (ERR) for both companies for fiscal year 2025–26.

OGRA raised the prescribed gas price for SNGPL from PKR 1,778.35 to PKR 1,895.25 per MMBTU. The utility had sought a far steeper hike of 58% to PKR 2,803 per MMBTU, citing a revenue shortfall of PKR 207.4 billion and increased costs of both indigenous and re-gasified liquefied natural gas (RLNG). SNGPL had proposed a net revenue requirement of PKR 700.97 billion, but OGRA approved PKR 534.46 billion for the next fiscal year.

The regulator attributed the proposed price hike to the growing financial burden of RLNG diversion, mandated under a federal cabinet decision dated October 30, 2023. OGRA has expressed concern over the rising trend and urged SNGPL to work with the federal government to review gas supply management, taking into account energy demand, international contracts, and macroeconomic conditions.

In contrast, OGRA recommended reducing the prescribed price for SSGCL to PKR 1,658.56 per MMBTU from the current PKR 1,762.51. SSGCL had requested a 135% increase to PKR 4,137.49 per MMBTU to cover a cumulative shortfall of PKR 498.76 billion from previous years and sought a revenue requirement of PKR 888.65 billion. OGRA, however, allowed only PKR 354.18 billion.

Despite the proposed reduction, SSGCL’s consumers may not see any relief, as a uniform gas sale price is maintained nationwide.

OGRA has forwarded its recommendations to the federal government for final approval. Once cleared, the regulator will notify the new rates.

OGRA has also urged the government to set category-wise gas prices for different consumer segments, as the adjustments are based on projected revenue shortfalls submitted by both utilities for FY26.