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ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has allowed Sui Northern Gas Pipeline Limited (SNGPL) to increase average price of gas by two percent for all categories of consumers for financial year 2020-21.

The regulator has allowed an increase in price of Rs13.42 per mmbtu.

Existing average sale prices is Rs 631.41 per mmbtu. The new price is Rs 644.84 per mmbtu.

The SNGPL is a gas company providing transmission and distribution in Punjab and the KPK.

Earlier, the Ogra allowed 5.6 percent increase in the gas price for consumers of the Sui Southern Gas Company (SSGC) which cater to Sindh and Balochistan region.

The Ogra has determined Review of Estimated Revenue Requirement (RERR) of the SNGPL for financial year 2020-21, and has sent the same to the Federal Government for sale price advice.

Any revision as advised by the Federal Government shall be accordingly notified by the Ogra.

Till such time, the existing category-wise natural gas sale prices shall prevail.

The oil and gas regulator has allowed Rs209.113 billion revenue requirement of the gas company for financial year 2020-21.

The gas company also demanded Rs215.240 billion revenue shortfall of previous year, however, the authority decline the request.

The Ogra has significantly slashed the SNGPL’s demand for increase in gas prices for FY 2020-21.

The reason for reduction in price is stability in the US$ exchange along with other disallowances made by the OGRA in respect of revenue and capital expenditures.

The authority has recomputed Rs26.301 billion (Rs60.15 per mmbu) for RLNG cost of service.

The petitioner claimed Rs28.9 billion (Rs72.33 per mmbtu) computed at 1103 mmcfd for the said year.

The petitioner stated that the authority determined RLNG cost of supply for the said year on the basis of total capacity of RLNG system (1,200 mmcfd) resulting in short recover of Rs2.2 billion.

The authority in the light of the federal cabinet’s decision revises meter rental at Rs40 per month with effect from September 1, 2020.

The authority, however, directs the petitioner to recover the arrears on this account in three equal installments.

The authority observes that the petitioner has been allowed to provide 10 percent of new connections, allowed in a year, on urgent fee basis, where connection must be installed within three months of deposit of urgent fee.

The regulator also reviewed that the progress in respect of installation of new connections till date for the said year and observed that around 125,000 connections have been installed during first six months compared with already allowed 400,000 connections.

Pendency of more than 2.7 million applications speaks volume about the performance and efforts of the petitioner.

The regulator declined enhanced demand of connections.

The authority shall however continue to allow new connections for combing mains within the towns, villages, and cities already served by the petitioner.

Additional 300 kms requested by the petitioner for combing main and 66 kms against head office reserves are allowed by the authority in principle.

Copyright Business Recorder, 2021