The Oil and Gas Regulatory Authority (OGRA) determined a 45 percent rise in prescribed natural gas prices for the 2022-23 fiscal year to meet income obligations of the two gas utilities — SNGPL and SSGCL — amid continuous efforts to revive a stalled IMF program on Friday.
Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) have separately submitted two distinct revenue decisions to the regulator for advice on gas sales prices for each segment of consumers.
The federal government is required to recommend a gas price for each slab of all categories based on its decision on subsidy and cross-subsidies among various categories but within the overall revenue target set by Ogra, according to amendments to the OGRA ordinance approved by the PTI government under the International Monetary Fund (IMF) program.
The law currently states that if the federal government fails to submit its gas price recommendations to OGRA within 40 days, the authorities recommended pricing for each category and slab will be automatically informed, and gas companies would be obligated to charge new rates.
SNGPL’s average suggested price is now Rs. 854.52 per million British thermal units (mmBtu), up Rs. 265 per unit or 45 percent.
The corporation requested a 198 percent (Rs. 1,079 per unit) rise in their authorized pricing of Rs. 1623 per mmBtu in order to generate roughly Rs. 597 billion in income, but the regulator only granted Rs. 260 billion, a 45 percent increase.
In addition to the above increase, OGRA stated that the financial impact of previous years’ shortfall of Rs. 264.894 billion, or Rs. 720.20 per mmBtu, had been referred to the federal government for an appropriate policy decision and was not included in the current determination. Punjab and Khyber Pakhtunkhwa are served by SNGPL’s gas distribution network.
SSGCL and SNGPL management claimed they were under pressure due to rising costs of doing business, expensive imports, currency depreciation, and prior-year overdue adjustments that were accepted by the regulator as valid heads but could not be notified by the government and OGRA.
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