Ogra refuses increase in gas price, recommends 10% reduction

For 2024-25, OGRA proposes uniform gas prices across Sindh, Balochistan; sets price at Rs1,401 per mmbtu

By: Zaheer Ali Khan, Zulfiqar Ali Mehto

May 21, 2024May 21, 2024

In a significant development for gas consumers, the Oil and Gas Regulatory Authority (OGRA) has declared the demands of both Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) to increase gas prices illegal.

This decision comes as a relief to consumers, with OGRA recommending to the SNGPL a reduction in gas prices from July 1.

OGRA has recommended a 10% reduction in gas prices for SNGPL, bringing the new average tariff to Rs1,636 per million British thermal units (mmbtu). This represents a decrease of Rs179.17.

The final notification for this reduction will be issued after consultation with the federal government. SNGPL had reported an impact of Rs862.61 per mmbtu due to the rupee exchange rate, but OGRA has sanctioned Rs580.59.

For SSGCL, OGRA has fixed the rate at Rs1,401.25 per mmbtu, reflecting a 4% reduction. The notification of this decrease has already been issued.

Proposed uniform gas prices

For the financial year 2024, OGRA has proposed uniform gas prices across Sindh and Balochistan, setting the price at Rs1,401 per mmbtu for all consumers. In contrast, the average price for Punjab and Khyber Pakhtunkhwa is proposed to be Rs1,636 per mmbtu. These rates are set to be applied from July 1, pending federal government approval.

While the average gas price have been adjusted, there are significant changes for specific consumer categories:

Domestic consumers: A significant increase has been recommended, with protected and non-protected domestic consumers facing a proposed hike of Rs1,200. For protected domestic consumers, the rate is proposed to increase from Rs1,280 to Rs1,400.

Tandoor: The price for ovens is proposed to rise dramatically, from Rs700 to Rs1,300 per cubic meter.

Commercial ice factories, industries: Conversely, prices for these sectors are set to be reduced.

The final decision on these proposed changes rests with the federal government. Until a new notification is issued, the existing prices will remain in effect.