ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has decided to review the existing gas pricing formula based on return on fixed assets keeping in view the current gas market liberalization.
Oil and Gas Regulatory Authority has been tasked to restructure the two public gas utilities by doing away with the fixed asset-based return in the light of recommendations of consultancy firm KPMG.
The regulator has started consultation with stakeholders to change the gas pricing formula. The regulator has scheduled a public hearing here on Friday to consider views of stakeholders.
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Currently, OGRA, since 2018, is allowing market-based rate of return to the gas utilities viz; SNGPL and SSGC on the value of its average net fixed assets in operation for each financial year.
OGRA, said that considering latest gas sector dynamics including demand/supply, price volatility, market liberalization and benchmarking in this regard undertaken world over, has decided to review existing gas pricing formula based on Rate of Return (ROR) through an independent consultant as per the terms of reference.
OGRA, after receipt of first draft report as furnished by M/s. KPMG, has decided to call public consultation with all stakeholders as per its ToRs and the relevant legal provisions to ensure transparency and inclusive stakeholder engagement,” the regulator said.
The gas utilities are opposing a proposal to shelve the guaranteed asset-based return formula and have asked the government to continue the current pricing regime.
The gas pipeline network continues to expand, resulting in hiking gas prices and profits of the utilities but led to gas shortages across the country. Sui Northern Gas Pipelines Limited’s (SNGPL) operating cost surged from Rs66 billion in the financial year 2019-20 to Rs94 billion in 2023-24, but at the same time, its earnings swelled from Rs19 billion to Rs38.9 billion despite the drop in gas supply.
Copyright Business Recorder, 2026
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