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The Sui Northern Gas Pipeline Limited (SNGPL) has recently made headlines with its request to increase gas prices by a whopping 147% for the fiscal year 2024-25. This request, if approved, will mark the third time in the year that gas rates have seen an increase, a decision that could potentially exacerbate financial strain on less affluent sectors of society.
The Oil and Gas Regulatory Authority (OGRA) is set to conduct a public hearing on this matter, with the first session scheduled to take place in Lahore. The proposed hike in gas prices is slated to come into effect from July 1, 2024. SNGPL's request stems from a revenue shortfall of over Rs. 189 billion, prompting the company to seek an increase in the average gas price to Rs. 4,446.89 per metric million MMBtu. This represents a significant jump of Rs. 2,646.18 per MMBtu, including previous year's shortfalls in the natural gas sector.
In addition to seeking approval for the price increase, SNGPL has also proposed a cost of service for regasified liquefied natural gas (RLNG) at Rs. 325.08 per MMBtu for the same period. The textile industry, however, has voiced its opposition to SNGPL's proposed gas hike, with organizations like the All Pakistan Textile Mills Association (APTMA) and Lahore Chambers planning to challenge the petition at the hearing.
Meanwhile, preparations are also underway to increase gas prices in other regions, with Sindh and Balochistan already affected and Punjab and Khyber Pakhtunkhwa potentially next in line. SNGPL's request has sparked concerns about the financial burden it would impose on consumers, especially those already grappling with soaring rates.
Sui Southern Gas Company (SSGC) has also submitted a request to OGRA for a gas price increase, further compounding worries about the financial strain on consumers. OGRA is set to conduct hearings in Lahore and Peshawar to evaluate SNGPL's application, with a decision expected in the near future.
If approved, the proposed gas price hike would have far-reaching implications, significantly elevating the cost of natural gas and intensifying economic challenges faced by households and businesses nationwide. At a time when inflation is already at alarming levels, this development could further burden citizens who are struggling to make ends meet.
With hearings and consultations underway, stakeholders are closely watching the proceedings, hoping for a balanced and sustainable resolution to the issue. The decision reached by OGRA will be crucial in determining the future trajectory of gas prices in Pakistan, impacting millions of consumers across the country.