Ogra notifies 45pc hike in gas prices from July – Pakistan

ISLAMABAD: Amid ongoing efforts to revive a stalled IMF program, the Oil and Gas Regulatory Authority (Ogra) on Friday set a 45 percent increase in regulatory natural gas prices for fiscal year 2022-23 to meet the income requirements of the two. gas companies — SNGPL and SSGCL.

The regulator has filed two separate determinations on the revenue requirements of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) for advice on the retail price of gas for each category of consumers.

According to the changes to the Ogra Ordinance approved by the PTI government under the International Monetary Fund (IMF) program, the federal government is required to recommend the gas price for each plate of all categories based on its decision on subsidy and cross-subsidy between different categories but within Ogra’s overall revenue target.

The law now states that if the federal government does not provide Ogra with its recommendations on gas prices by category and plate within 40 days, the prescribed prices set by the authority for each category and plate will be automatically communicated and the gas companies will be forced to renew tariffs. to charge.

The regulator has set an average for SNGPL at Rs854.52 per million British thermal units (mmBtu), up from Rs265 per unit or 45 percent higher. The company demanded a 198 pc (Rs 1,079 per unit) increase in the regulatory price of Rs 1,623 per mmBtu to secure about Rs 597 billion in revenue, but the regulator allowed annual sales of Rs 260 billion, an increase of Rs 260 billion. 45 pc.

On top of the above increase, Ogra said that the financial impact of the deficit of Rs264,894bn in previous years i.e. Rs720.20 per mmBtu had been referred to the federal government for appropriate policy decision and therefore is not part of immediate determination. † SNGPL has gas supply network in Punjab and Khyber Pakhtunkhwa.

Similarly, Ogra set an average prescription price for SSGCL at Rs699.30 per mmBtu, showing an increase of 44pc or Rs308 per unit. The regulator approved SSGCL’s revenue requirement for FY2022-23 at Rs285.2bn instead of Rs287bn demanded by the company.

Ogra said it had significantly reduced gas companies’ demand to increase gas prices for FY2022-23. The main reasons for price increases are international oil prices, currency devaluation and unjustified gas losses and capital expenditures.

Ogra said the finding asked the federal government for advice on selling prices by category. Any revision, as advised by the federal government, will be notified accordingly by Ogra.

In public hearings, users complained about the poorly managed and inefficient gas companies, poor service, lower gas pressure and gas shedding.

The boards of SSGCL and SNGPL claimed they were under pressure from higher operating costs, expensive imports, devaluation of the rupee and outstanding adjustments last year that were approved by the regulator as legitimate heads but could not be reported by the government and Ogra .

Published in Dawn, June 4, 2022

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