Gas consumers across the country did not get any relief in the new fiscal year as the Pakistan Muslim League-Nawaz (PML-N) government declined on Monday to pass on cut in the tariff proposed by the Oil and Gas Regulatory Authority (Ogra).
The regulator, on the other hand, announced an increase in prices of liquefied petroleum gas (LPG) from July 1, 2024. According to an Ogra notification, domestic LPG cylinder price has been increased by Rs1.43 per kilogramme.
Earlier, in a decision sent to the federal government, Ogra had slashed gas prices by up to 10% for public utilities, from the financial year 2024-25, starting July 1. The regulator reduced the tariff while determining the revenue requirements of Sui gas companies for the current fiscal year.
However, the government refused to pass on the benefit to the consumers and maintained the existing prices for the financial year 2024-25. Simultaneously, the federal government increased gas prices for general industry (Captive) by raising them by Rs250 per million British thermal units (MMBTU).
Ogra also notified the new tariff of Rs3,000 per MMBTU, up from previous Rs2,750 per MMBTU, from Monday. Ogra said in a statement that the federal government had the sole jurisdiction to fix sale prices for different categories of gas consumers, considering its socio-economic agenda and sectoral policies.
Ogra had recommended an average prescribed price of Rs1,635.9 per MMBTU for Sui Northern Gas Pipelines Limited (SNGPL), reflecting a decrease of Rs179.17 per MMBTU, or 10%, and Rs1,401.25 per MMBTU for Sui Southern Gas Company (SSGC), a reduction of Rs59.23, or 4%.
Ogra had calculated the financial impact of the previous years’ revenue shortfall at Rs580,585 million, compared to SNGPL’s claim of Rs862,612 million. It stated that SNGPL’s total operating income was estimated at Rs691,877 million against the revenue requirement of Rs607,403 million.
This showed a surplus of Rs66,524 million for fiscal year 25. To adjust the surplus, Ogra revised the prescribed price down by Rs179.17 and set the average prescribed price at Rs1,635.90 per MMBTU for the SNGPL.