Gas becomes dearer as 50% hike notified
The government on Sunday notified an increase in the fixed charges on gas bills by 50% and also jacked up gas tariffs for non-residential consumers.
According to a notification issued by the Oil and Gas Regulatory Authority (OGRA) on Sunday, the fixed charges were increased by Rs200 to Rs600 for the protected category of domestic consumers.
In the non-protected category, the fixed charges were increased from Rs1,000 to Rs1,500 for monthly consumption of up to 1.5 hm3. Likewise, the fixed charges for consumption exceeding 1.5 hm3 were jacked up to Rs3,000.
The protected category includes a domestic consumer whose average consumption of last 4 winter months (November to February) shall be below or equal to 0.9 hm3. In contrast, the non-protected category includes a domestic category whose average consumption of last 4 months shall be above 0.9 hm3.
The revised tariff also applies to various institutional and commercial entities. Government institutions, semi-government bodies, hospitals, and educational institutions will now be charged Rs3,175 per MMBTU. For traditional tandoors (bread ovens), gas rates have been set between Rs110 and Rs700 per MMBTU, depending on usage levels.
Commercial consumers will now pay Rs3,900 per MMBTU, while general industrial users will be charged Rs2,300 per MMBTU. Captive power producers — industries generating their own electricity — will pay Rs3,500 per MMBTU, and CNG stations will be billed at Rs3,750 per MMBTU.
Cement factories will face the highest tariff among industrial users, with rates set at Rs4,400 per MMBTU. Fertilizer plants will be charged Rs1,597 per MMBTU. For K-Electric and other electricity generation companies, the new tariff has been fixed at Rs1,225 per MMBTU.
The Oil & Gas Regulatory Authority last month determined the Estimated Revenue Requirements (ERR) for FY 2025-26 for both SNGPL and SSGCL. According to the determinations, SNGPL requires revenues of Rs534.5 billion and SSGCL requires revenues of Rs354.2 billion to sail through the FY 2025-26 respectively. The cumulative revenue requirements of both the Sui companies are Rs888.6 billion for the FY 2025-26.
The law mandates the federal government to ensure that the consumer gas sale prices should not be less than the revenue requirement determined by the Authority. At the previous notified consumer gas sale prices effective February 01, 2025 the estimated revenues of both Sui companies by end FY 2025-26 were Rs847.714 billion.
Some of the members of the ECC criticized giving guaranteed 24% return on assets to Sui companies, which discourage efforts to improve efficiency by reducing line losses.
The prices were changed to meet a condition of the International Monetary Fund to biannually adjust the gas prices.