Gas tariff raised by Rs 435 per MMBTU

ISLAMABAD: Citizens already grappling with inflated bills and rising inflation now face an additional blow to their wallets as the Oil and Gas Regulatory Authority (OGRA) has raised the gas tariff by Rs 435 per MMBTU to address a Rs 98 billion shortfall.

This hike, effective retrospectively from January 1 to June 30, marks the second increase in gas prices in the current financial year 2023-24.

According to OGRA’s decisions posted on its official website on February 2, the tariff for Sui Northern gas has surged to Rs 1,673.82 per MMBTU from the previous Rs 1,238.68, while Sui Southern’s tariff has risen to Rs 1,466.40 per MMBTU from Rs 1,350.68.

The government has raised the tariff of Sui Northern Gas Pipelines Limited (SNGPL) by 35.13% and Sui Southern Gas Company Limited (SSGCL) by 8.57%. OGRA recommended an average increase of 23.16% in the prescribed gas price to Rs 1,590 per MMBTU from the earlier average of Rs 1,291 per MMBTU.

Read also: Rawalpindi Ring Road plantation drive set to begin next week

The International Monetary Fund (IMF) urges the government to implement biannual gas price reviews to curb the circular debt, which currently stands at Rs 1,250 billion. OGRA is mandated to announce gas tariffs biannually, with the government enforcing prices from July 1 and January 1 in any given financial year.

If the government does not respond to OGRA’s determination within 40 days, the regulator’s tariff automatically takes effect, as per the OGRA ordinance. The caretaker government aims to make a decision by mid-month and implement a further gas price hike effective from February 1, 2023.

Earlier, on June 2, 2023, OGRA announced a 50% increase for Sui Northern Gas consumers, raising the price to Rs 1,238.68 per MMBTU, effective from July 1, 2023. Similarly, the price for Sui Southern Gas consumers surged by 45% to Rs 1,350.68 per MMBTU for the fiscal year 2023-24.

The caretaker government previously increased gas prices by up to 193% from November 1, 2023, estimating revenue tariff of Rs 980 billion in FY24.