The Oil and Gas Regulatory Authority (Ogra) is convening a public hearing in Lahore today to discuss Sui Northern Gas Pipeline Limited’s (SNGPL) petition, proposing a staggering 147% surge in gas prices for the Fiscal Year 2024-25.
If approved, this significant increase, marking the third within a year, is expected to have profound implications on inflation rates and burden the economically disadvantaged.
SNGPL, serving over 7.22 million consumers primarily in Punjab, Khyber Pakhtunkhwa, and Azad Jammu and Kashmir, faces a projected revenue shortfall of Rs189.18 billion.
The proposed hike in gas prices is scheduled to come into effect from July 1, 2024, aiming to raise the average gas price to Rs4,446.89 per Metric Million British Thermal Unit (mmbtu), a notable increase of Rs2,646.18 per mmbtu.
The upcoming public hearing in Peshawar on March 27 will provide stakeholders, consumers, and the general public an opportunity to voice their concerns before Ogra reaches a decision.
In a separate development, the textile industry vows to challenge the substantial gas tariff increase proposed by SNGPL, with industrial bodies like Aptma and Lahore Chambers opposing the petition during the hearing.
Aptma plans to scrutinize SNGPL’s assumptions regarding RLNG diversion and projected costs, including cross-subsidy implications and high unaccounted for gas (UFG) rates.
The industry will also question SNGPL’s planned network expansion and associated costs, seeking clarification on various expenses, including late payment surcharge and working capital.
During the hearing, Aptma will demand an assessment of capital and revenue expenses claimed for UFG control activities, considering the significant increase in domestic sector consumption within the SNGPL network.
The textile sector’s challenge comes amidst a backdrop of rising domestic gas consumption and ongoing revisions in gas sale prices by the federal government.
