In order to cover the Rs98 billion shortfall, the Oil and Gas Regularly Authority (Ogra) raised gas tariffs even further, meaning that citizens are still suffering from crippling inflation and exorbitant bills.
The price increases will take effect retroactively on January 1 and last until June 30. In the current fiscal year 2023–24, this is the second increase in gas prices.
The tariffs of Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL) were raised by 8.57% and 35.13%, respectively, by the government.
The regulator suggested on February 2 that the prescribed gas price be increased on average by 23.16%, to Rs1,590 per MMBTU, from the previous June 2, 2023, average price of Rs1,291 per MMBTU.
The goal of the International Monetary Fund (IMF) is to lower the circular debt, which is now at Rs1,250 billion, by having the government implement the gas review twice a year.
The government must impose gas rates starting on July 1 and continuing through January 1 of each current fiscal year. The Ogra is required to declare the gas tariff every two years.
The cost for Sui Northern gas has raised to Rs1,673.82 per MMBTU, according per Ogra’s choices, which were posted on February 2 on their official website. The previous price of Rs1,238.68 per MMBTU was set on June 2, 2023. Similarly, Sui Southern’s gas pricing was raised by the regulator from Rs1,350.68 per MMBTU to Rs1,466.40 per MMBTU.
“This is a comparison of gas prices based on a determination to be implemented from July 1 in the fiscal year 2023–2024, from the prior determination,” a senior official stated.
The Ogra determination has been sent to the government, and in accordance with the Ogra ordinance, the tariff set by the regulator will take effect automatically if the government does not reply to the determination within 40 days.
“The caretaker government will try to take a decision by mid of the current month and enforce a further increase in the gas prices effective from February 1, 2023,” a government source stated.
Ogra declared on June 2, 2023, a 50% rise (to Rs 415.11 per MMBTU) for Sui Northern Gas customers. As of July 1, 2023, the gas price will be Rs 1,238.68 per MMBTU. Additionally, it raised the price of gas for Sui Southern Gas customers by 45% (417.23 per MMBTU) to Rs1,350.68 per MMBTU for the 2023–2024 period.
Beginning on November 1, 2023, the caretaker administration raised gas prices to 193%, with a projected revenue tariff of Rs980 billion in FY24.
The government had already declared that there would be no more monthly intake into the gas circular debt for the fiscal year 2023–2024 due to the significant increase in gas prices, which would take effect on November 1, 2023.
“The low gas production in the Sui Southern system, which decreased from 805 mmcfd to 730 mmcfd, resulted in low gas sale growth, limiting the revenue to Rs802 billion against the revenue target of Rs980, showing the shortfall of Rs98 billion.” To make up for the Rs98 billion income shortfall, both gas firms will see average increases of 23.16%.
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