OGRA reduces gas prices by up to 6%

The regulator rejects hefty increase demand of utility companies

ISLAMABAD:

The Oil and Gas Regulatory Authority (Ogra) has rejected a hefty increase in gas prices and instead reduced the price up to 6 per cent for consumers.

According to a notification issued by the regulator on Tuesday, gas prices for the consumers of gas utility companies – Sui Northern Gas Pipeline Company Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) – have been reduced by 6 per cent and SSGCL 2 per cent respectively.

“The Oil and Gas Regulatory Authority (Ogra), under Section 8(1) of OGRA Ordinance, 2002, vide its decision dated July 13, 2020 & July 14, 2020, has determined the revenue requirement of gas companies i.e., Sui Northern Gas Pipeline Company Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) for FY 2020-21 respectively and has sent the same to the federal government for gas sale price advice in respect of each category of consumers under Section 8(3) of said Ordinance,” the notification read .

The SNGPL had demanded to increase gas price to Rs1,287.19 per mmbtu against existing price of 664.25 per mmbtu. However, the regulator decided to reduce price to Rs623.31 per mmbtu which is 106.5% less than demand and 6% less than existing price.

The SSGC had demanded to raise price to Rs881.53 per mmbtu against existing price of Rs796.18 per mmbtu.

However, Ogra reduced price to 750.90 per mmbtu which is 17.4% less than demand and 2% less than existing price. The regulator has significantly slashed the gas prices against the companies’ demand for the increase in gas prices for FY2020-21.

The main reason for reduction in price is international oil prices along with other disallowances made by Ogra in respect of revenue and capital expenditures.