The Oil and Gas Regulatory Authority (OGRA) lobbed a gas bomb on the populace by raising the tariff for customers of two big gas firms by up to 74%, starting in this FY 2022-23, despite biting inflation and dwindling purchasing power.
In a notification released on Wednesday, the regulator increased the rates for household consumers, businesses, tandoors, captive power plants, and general industries, including export-oriented sectors, for Sui Northern Gas Company Limited (SNGPL) and Sui Southern Gas Company (SSGC).
It’s interesting to note that the regulator eliminated the formerly applicable slabs of gas consumption and their associated rates and set the price for SNGPL customers at Rs. 952.17 per million British thermal units (mmBtu).
Similar to SSGC, Rs. 1161.91/mmBtu has been set as the prescribed price.
A simple examination of the ruling reveals that lower slabs, who consume less and are practically poor consumers, are most negatively impacted by the decision because their gas prices have tripled, whilst, for the higher slabs, the prices have actually decreased.
The regulator made its choice following public hearings on petitions filed by SNGPL and SSGC in November 2022, during which both firms asked for a significant rise in their prescribed gas prices for the current fiscal year (FY23) in order to meet their financial obligations.
SNGPL, which manages the gas network in Punjab and Khyber Pakhtunkhwa, requested a rise of Rs. 1,294.02/mmBtu, and SSGC, which supplies Sindh and Balochistan, requested an increase of Rs. 667.44/mmBtu.
In accordance with the most recent OGRA judgement regarding their petitions, the prescribed gas prices for SNGPL and SSGC have each raised by 74.42% and 67.75%, respectively.
The average price for SNGPL has risen by Rs. 406/mmBtu to Rs. 952.17/mmBtu in absolute terms. The gas price for SSGC has also increased by Rs469/mmBtu to Rs. 1,161.95/mmBtu.
The federal government has received the regulator’s conclusion.
Now, after receiving this notification, the government will decide on it within 40 days. It will take effect immediately if the government does not give notice first.
The lowest prescribed price for domestic consumers has increased from the previous Rs. 121/mmBtu to Rs. 952.17/mmBtu, representing an increase of 687%.
The price for the following slab has gone up from Rs. 300/mmBtu to Rs. 952.17/mmBtu.
It’s interesting to see that prices have dropped for the top two slabs after the rate was set at Rs. 952.17.
Prior to this, the second slab paid Rs. 1,107/mmBtu, while the last slab paid Rs. 1,460/mmBtu.
For wealthy people, petrol prices have decreased significantly when comparing these prices to the new pricing.
Similar to this, the five slabs have been eliminated for business consumers (tandoor), and the charge has been set at Rs. 952.17/mmBtu.
Previously, the lowest and highest gas slabs for the tandoors were charged at Rs. 110/mmBtu and Rs. 700, respectively.
The price for the general industries, which is a sector focused on exports, has increased from Rs. 819 to Rs. 952.17/mmBtu.
The cost of gas for captive power plants has gone up from Rs. 852 to Rs. 952.17. It’s interesting to note that costs have gone down for CNG, cement, and fertilizer.
To read our blog on “SSGC stops supplying gas to factories in Karachi,” click here.
