OGRA approves major increase in gas prices across Pakistan

ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) has approved significant hikes in gas prices, affecting consumers nationwide, ARY News reported.

According to reports, the decision, sent to the federal government for final approval, will see an average increase of 25.78 percent (pc) for consumers in Sindh and Balochistan, while consumers in Islamabad, Punjab, and Khyber Pakhtunkhwa will experience an 8.71pc rise.

Under the new tariff structure, the average gas price for Sui Southern Gas Company (SSGC) has been set at Rs1,762.51 per MMBTU, and for Sui Northern Gas Pipelines Limited (SNGPL), it’s Rs1,778.35 per MMBTU. These changes aim to address financial needs totalling Rs527.55 billion for SNGPL and Rs319.78 billion for SSGC, along with adjustments for prior receivables.

The companies had originally sought increases in gas prices as high as 208.67pc but were met with public hearings by OGRA last month. OGRA’s decision to forward the recommendations to the federal government for final approval means that a notification will be issued once the government grants its consent.

This revision in gas prices comes amidst rising financial pressures on the gas companies, with SNGPL receiving approval to recover over Rs50 billion from previous adjustments, and SSGC allowed to recover Rs48.85 billion.

Read More: Govt to increase gas prices for the fourth time in two years

Earlier in November 2024, Government of Pakistan hinted at increasing gas prices for domestic consumers for the fourth time in two years.

Reports suggested that a request had been made to increase the gas prices by 3.66 percent (pc) for Punjab, Khyber Pakhtunkhwa, And Islamabad, and by 53.47pc for Sindh and Balochistan. SNGPL had proposed a hike of Rs64.16 per MMBtu, bringing its average price to Rs1,810.38 per MMBtu. Meanwhile, SSGC had requested an increase of Rs669.07 Per MMBtu, raising its average price to Rs1,920.39 Per MMBtu.

The gas companies had requested the price hike effective from July 1, 2024, meanwhile, sources report that domestic consumers have faced an additional burden of Rs953 billion due to the rising gas prices.

Since Jan 2023, gas prices for domestic consumers have been increased three times, with a single hike under the previous coalition government and two increases during the short tenure of caretake government.

In total, more than Rs. 900 billion has been added to the burden on gas consumers for the past two years.