The Oil and Gas Regulatory Authority (OGRA) has approved a substantial hike in gas prices, impacting consumers nationwide. This decision, awaiting final approval from the federal government, is set to increase the average gas prices for various regions significantly.
Gas Price Hike by Region
Consumers in Sindh and Balochistan are expected to face an average price increase of 25.78%, while those in Punjab, Islamabad, and Khyber Pakhtunkhwa will experience an 8.71% rise.
Revised Tariffs for SSGC and SNGPL
Under the revised structure, the average gas price for Sui Southern Gas Company (SSGC) will now stand at Rs1,762.51 per MMBTU, and for Sui Northern Gas Pipelines Limited (SNGPL), it will be Rs1,778.35 per MMBTU. These adjustments are aimed at addressing financial requirements of Rs527.55 billion for SNGPL and Rs319.78 billion for SSGC, including arrears from prior receivables.
Initial Requests and Public Hearings
Earlier, SNGPL and SSGC had requested price hikes as high as 208.67%, prompting OGRA to hold public hearings. Following the deliberations, OGRA approved a moderate increase and forwarded the decision to the federal government for final consent. A notification will be issued once the approval process is complete.
Financial Burden on Consumers
This marks yet another increase in gas tariffs, adding to the financial burden on consumers. The new hikes also include recovery of prior adjustments, with SNGPL authorized to recover Rs50 billion and SSGC allowed to recover Rs48.85 billion.
Past Gas Price Hikes
In November 2024, the government hinted at further increases in gas tariffs for domestic consumers, which would mark the fourth hike in two years.
- SNGPL had proposed a hike of Rs64.16 per MMBTU, bringing its average price to Rs1,810.38 per MMBTU.
- SSGC requested an increase of Rs669.07 per MMBTU, raising its average to Rs1,920.39 per MMBTU.
Reports suggest that domestic consumers have already faced an additional burden of Rs953 billion due to rising gas prices over the last two years.
Historical Context
Since January 2023, gas tariffs for domestic consumers have increased three times:
- Once under the previous coalition government.
- Twice during the tenure of the caretaker government.
This ongoing escalation has added a cumulative burden of over Rs900 billion on gas consumers in just two years.
Conclusion
The final approval from the federal government remains crucial for the implementation of the revised tariffs. The decision reflects the financial strain on gas companies and the rising costs of energy infrastructure across Pakistan. Consumers are urged to prepare for the potential impact of these significant changes.
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