ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Wednesday recommended permitting two gas companies, the Sui Northern Gas Pipelines Limited (SNGPL) and the Sui Southern Gas Company Limited (SSGCL) to raise gas prices by 74.42 percent and 75.35 percent, respectively for the financial year 2022-23.
The decision has been taken on the petitions (estimated revenue requirements) filed by both companies for an increase in gas tariff to meet their revenue requirements.
The regulator has allowed the SNGPL to increase its average prescribed gas prices for the fiscal year by Rs406.28 per mmbtu and the SSGCL by Rs499.28 per mmbtu.
In their petitions, both companies asked to allow a raise of Rs1,294.02 per mmbtu and Rs667.44 per mmbtu, respectively, effective from July 2022.
In case the government decided to accept the recommended gas prices of the Ogra, the average prescribed gas price for the SNGPL consumers would increase from Rs545.89 per mmbtu to Rs952.17 per mmbtu. The average prescribed gas price for the SSGCL consumers would also raise from Rs662.63 per mmbtu to Rs1,161.91 per mmbtu.
In its petition filed in October 2022, the SNGPL had projected a revenue shortfall of Rs178.814 billion for the current fiscal year as well as Rs295.268bn in previous years and requested the regulator to raise prices by Rs1,294.02/mmbtu.
The authority has not included any impact as part of instant determination and decided to refer the matter in respect of previous years’ shortfall to the federal government for devising appropriate policy.
The regulator worked out the SNGPL’s revenue shortfall in the financial year 2022-23 at Rs109.180 billion on natural gas sale price. It determined the company’s revenue requirement to be Rs306.245 billion for the current fiscal year.
The authority recommended to charge all directly attributable costs to RLNG cost of service and equitably included all operating income arising from RLNG business segment while computing the RLNG cost of service Rs133.54 per mmbtu against the request of Rs253.20 per mmbtu for the SNGPL.
The oil and gas regulator also determined the SSGCL’s requirement for the current financial year at Rs327.227 billion. The cost of RLNG service has been determined Rs20.15 per mmbtu against a petition of Rs26.23 per mmbtu.
In its previous hearing, the regulator had determined a 45 percent increase in the prescribed prices of natural gas to meet gas companies’ revenue requirements.
The Ogra’s decision has been forwarded to the federal government which is bound to advise the regulatory authority within 40 days on the minimum charges and the sale price for each category of retail consumers for notification in the official gazette.
Copyright Business Recorder, 2023