SNGPL seeks 137pc increase in prescribed gas price

ISLAMABAD: The Sui Northern Gas Pipeline Limited (SNGPL) has sought an increase in prescribed/cost of gas price by Rs506.35 per mmbtu (41 per cent) to Rs1,762.83 from Rs1,246.49 per mmbtu for estimated revenue requirement for fiscal year 2023-24.

The petitioner has asked for 137 per cent increase in the prescribed price to recover shortfall of previous years to Rs2,961.98 per mmbtu and Rs293.07 per mmbtu for RLNG supply with effect from July 2023.

The SNGPL filed estimated revenue requirement (RERR) for fiscal year 2023-24. The company also requested interim government to increase the prescribed prices/sale prices of gas in such a way that the revenue requirement of the company is fully met.

The increase has been asked due to change in crude oil price, exchange rate, revision in sale prices and inclusion of cost of RLNG diversion.

The shortfall in indigenous gas business for fiscal year 2023-24 is projected Rs179.160 billion, shortfall including previous years is Rs606.990 billion and RLNG cost of supply is estimated Rs72.160 billion.

The SNGPL’s petition is being revised on the basis of actual cost of gas and sales data for the months of July and August 2023, which has resulted in reduction in shortfall of indigenous gas business by Rs2.3 billion i.e. from Rs181,515 million to Rs179,160 million.

The gas companies have sought increase of prescribed gas price for 7.6 million industrial, commercial, and domestic consumers of SNGPL.

The calculation is based at projection that January-June 2024 the exchange rate is Rs290 against US dollar, average C&F crude oil prices is $95 per barrel an ufg is 7.66 per cent.

In response to the SNGPL’s application, OGRA is scheduled to conduct a hearing on December 11 to evaluate and deliberate upon the proposed price increase.

In a separate petition, the gas company has sought increase in gas security deposit for new and existing system gas and RLNG consumers. Minimum security deposit for new domestic consumers (system gas) should be Rs4,500 and existing consumers whose consumption in winter is registered higher and the minimum threshold i.e. Rs4,500 the security will be recovered equivalent to 90 days consumptions based on average consumption of last year’s winter season.

Copyright Business Recorder, 2023