Ogra proposes 35.13% increase in gas tariffs once again

The Oil and Gas Regulatory Authority (Ogra) proposes an increase in gas tariffs with 35.13% for SNGPL and 8.57% for SSGCL. SNGPL refers to Sui Northern Gas Pipelines Limited. SSGCL refers to Sui Southern Gas Company Limited.

Citizens continue to face expensive bills and crippling inflation. Meanwhile, Ogra has proposed to raise the gas price to cover the Rs 98 billion shortage.

This would be the second gas price increase in the current fiscal year, 2023-2024 if the government accepts the Ogra summary to increase gas tariffs. The higher costs will be applied consecutively from Jan 1, 2024, to June 30, 2024.

IMF wants govt to implement gas review implementation biannually to reduce circular debt which currently stands at Rs1,250bn

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Ogra suggested a 23.16% rise in the average prescribed gas price to Rs 1,590 per MMBTU from the previous average price of Rs 1,292 per MMBTU set on June 2, 2023.

The International Monetary Fund (IMF) wants the government to implement the gas tariff twice a year to minimize the circular debt. It is presently Rs 1,250 billion.

So, Ogra proposes the 35.13% increase for SNGPL and 8.57% for SSGCL as it needs to recommend gas tariffs twice a year. The government has to implement gas pricing on July 1 and then on Jan 1 of any current fiscal year. It is because of the terms and conditions of the IMF.

However, the government stated there would be no more monthly taxes for gas circular debt for the fiscal year 2023-2024. It was due to a massive increase in gas prices from Nov 1, 2023, by 193%.

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According to Ogra, Sui Northern gas price increased to Rs 1,673.82 per MMBTU on Feb 2, 2024. It increased from Rs 1,238.68 established on June 2, 2023. The Sui Southern gas price increased by Rs 1,466.40 per MMBTU from Rs 1,350.68 per MMBTU.

The Pakistani government has received the Ogra summary regarding the increased gas prices. However, If the government does not respond within 40 days, Ogra will immediately implement gas tariffs under the Ogra ordinance.

Earlier, Ogra announced a 50% increase in Sui Northern gas price to Rs 1,238 per MMBTU. It increased from Rs 415.11 on July 1, 2023. It also increased gas prices by 45% from Rs 417.23 per MMBTU to Rs. 1,350.68 for Sui Southern Gas customers.