ISLAMABAD, Aug 20: The Oil and Gas Regulatory Authority (Ogra) on Wednesday increased wellhead gas prices of another 12 fields in some cases by more than 41 per cent with retrospective effect from July 1, 2008 owing to higher international crude and furnace oil rates over the last six months.

With this, the number of fields where gas production prices have been increased during the current month has reached 24 that would lead to similar increase in consumer gas tariff with effect from December 31, 2008. This is in addition to a recent 31 per cent increase in consumer gas rates effective July 1, 2008.

According to new rates announced by Ogra on Wednesday, the wellhead price of Sadkal field in Punjab has been raised by 41.2 per cent, from Rs366.78 per MMBTU (million British thermal unit) to Rs517.78 per MMBTU. Similarly, the rate of Sari Hundi field has been increased by 39 per cent to Rs476.51 per MMBTU from Rs342.94 per unit. The wellhead rate of Kandkot field in Balochistan was raised by 30 per cent to Rs139.84 per MMBTU from Rs107.47 per unit.

The wellhead rates of six other fields – Dakhani, Daru, Dhodhak, Bilal, Nandpur Panjpir and Pirkoh – were increased by 11.30 per cent each while the rates of Chachar and Missakiswal were nominally raised by less than one per cent each. The Ogra had raised wellhead rates of 12 other fields ranging between 11-35 per cent on August 5.

Under different gas sales and purchase agreements with the private companies, the price of gas produced is linked with international crude and furnace oil prices. However, the elected government in 1999 had revised these agreements whereby the gas producers provided 80 per cent discount to the government as crude prices crossed $36 per barrel.

The increase in wellhead gas rates has never been so big since 1950 when Pakistan’s first gas field Sui went into commercial production.

An Ogra official said Pakistan had no control over the international market and Ogra was bound by the pricing agreements the government had signed with the gas exploration and production companies to allow them higher rates.

On the basis of revised wellhead rates, the gas utilities SSGCL and SNGPL would file requests for increase in consumer tariff that would come into force on December 31, 2008.

Under gas sales and purchase agreements with different exploration and development companies, the payments to the majority of the producers are made by the government in foreign exchange while others are paid in Pakistani currency.

The wellhead gas rates of all gas fields except Sui are directly linked to the international crude and furnace oil prices. At $36 a barrel of international oil prices, the gas producers are required to share the windfall with Pakistan government. This adds to the profitability of gas producers and higher revenues to the government.