OGRA approves steep gas tariff hike

The Oil and Gas Regulatory Authority (Ogra) has recommended a gas tariff hike of up to 25.78% for the financial year 2024-25, according to two separate decisions issued on Tuesday.

Ogra determined a 25.78% increase in the prescribed prices of the Sui Southern Gas Company Limited (SSGCL) and an 8.71% increase for the Sui Northern Gas Pipeline Limited (SNGPL) after reviewing the Estimated Revenue Requirement (RERR) of both utilities for the current financial year.

Both the determinations were made under Section 8(2) of the Ogra Ordinance, 2002. The determinations have been sent to federal government for receipt of category-wise natural gas sale price advice as required under Section 8(3) of the Ogra Ordinance.

OGRA determined a hike of Rs361.26 per metric million British thermal unit (MMBTU) or 25.78% in the prescribed gas prices of the SSGCL. The SSGCL had requested for a hike of 208.67% to Rs4,325.24 per MMBTU, but Ogra allowed a hike of Rs361.26 – from the existing Rs1,410.25 to Rs1,762.51 per MMBTU.

In its petition the SSGCL had projected revenue requirement of Rs401.655 billion for fiscal 2024-25, however, OGRA determined the projection at Rs319.481 billion. Similarly, the company sought Rs502.981 billion as adjustment for previous year revenue shortfall, however, the regulator allowed Rs48.853 billion sale revenue at the current prescribed price.

For the SNGPL, Ogra determined a hike of Rs142.45 per MMBTU or 8.71% in the prescribed gas prices. According the decision, SNGPL had requested for a hike of 10.68% in the prescribed prices from the existing Rs1,635.90 per MMBTU to Rs1,810.38 per MMBTU.

However, the regulator determined a hike of Rs142.45, raising the price to Rs1,778.35 per MMBTU. In its petition the SNGPL had projected revenue requirement of Rs580.744 billion for fiscal 2024-25, however OGRA determined Rs527.548 billion. Though, the company had not sought any adjustment for previous year revenue shortfall, but the regulator allowed Rs50.803 billion.

Through these determinations, the federal government had been requested for advice on the category-wise sale prices, OGRA said. "Any revision, as advised by federal government, shall be accordingly notified by Ogra," it said "Till such time, the existing category-wise natural gas sale prices shall continue to prevail, it added.