ISLAMABAD: Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGCL) have demanded up to 237 per cent increase in natural gas rates to generate about Rs660 billion in additional funds during the current fiscal year.

In separate tariff petitions to the Oil & Gas Regulatory Authority (Ogra), the Lahore-based SNGPL on Tuesday sought an increase of Rs1,294 per million British thermal unit (mmBtu) or 237pc while the Karachi-based SSGCL demanded Rs668 per unit or 96pc hike to meet their revenue requirements for 2022-23.

The average gas price demanded by SNGPL, thus, would cross Rs1,840 per unit from the existing rate of Rs546 per mmBtu while that of SSGCL would go beyond Rs1,360 per unit from the current Rs693 per mmBtu.

SNGPL has projected a shortfall in its revenue requirement for FY23 at Rs178.814bn including Rs445m on account of LPG air-mix projects. For this head, the company that supplies natural gas and regasified liquefied natural gas (RLNG) to Punjab and Khyber Pakhtunkhwa has sought an increase in its average prescribed price by Rs448 per unit with effect from July 1.

Ogra convenes public hearings on Nov 15 and 21

The SNGPL has also included another Rs295.268bn revenue shortfall outstanding against previous years, with a per unit increase of an additional Rs805 per mmBtu. It is thus seeking a total increase in the average prescribed price by Rs1,294 per unit to compensate for the gas cost and other expenses.

The company has also demanded another Rs1,016 per unit as cost of services for RLNG including Rs762 per mmBtu on account of the differential impact of the diversion of RLNG to the residential consumers at cheaper rates in winter.

On the other hand, the SSGCL which supplies gas to Balochistan and Sindh has projected a shortfall in its revenue requirement for the said year at Rs184.88bn including Rs34bn of the un-recoup shortfall for FY2021-22. As such, it demanded an increase of Rs668 per unit with effect from July 1 to compensate for an increase in the cost of gas and other expenses.

In addition, the SSGCL has also demanded another Rs26.23 per unit as the cost of service for RLNG supplies. The SSGCL has demanded that the overall prescribed price for gas should be fixed at Rs1,360 per unit from the existing rate of Rs693 per mmBtu.

Both companies have claimed that the major reason for the higher revenue requirement was linked to the international price of crude oil and furnace oil in line with agreements signed by the government with gas producers.

Ogra has scheduled public hearings in Lahore and Karachi on Nov 15 and 21 to consider the tariff petitions of SNGPL and SSGCL, respectively.

Published in Dawn, November 9th, 2022