Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) have requested higher gas prices for the current fiscal year. Both companies have submitted applications to the Oil and Gas Regulatory Authority (OGRA).
The gas utilities want the proposed revised rates to take effect from July 1 of the current fiscal year. Their requests include different increases based on their respective financial and operational requirements.
According to the applications, Sui Northern has proposed a modest increase in its average gas price. The company has requested an increase of Rs10.40 per million British thermal units (MMBTU). This would raise its average rate from Rs1,702 to Rs1,712.40 per MMBTU.
Meanwhile, Sui Southern has requested a much larger increase. The company has proposed raising its average gas price by Rs366.75 per MMBTU. Under the proposed revision, its average rate would reach Rs2,071.75 per MMBTU.
SNGPL Includes LNG Costs in Gas Price Request
Sui Northern has also included additional liquefied natural gas (LNG) expenses in its pricing calculation. The company has requested the inclusion of Rs60.147 billion in LNG service costs.
According to its application, the estimated LNG cost stands at Rs471.16 per MMBTU. The company has highlighted limited availability of locally produced gas during winter.
SNGPL expects domestic gas supplies to remain insufficient during the colder months. It believes additional arrangements will be necessary to meet consumer demand.
The company has estimated that it will require 16 LNG cargoes to manage the expected supply shortage. These imports would help maintain supplies when local production falls.
Rising International Oil Prices Also Cited
Both gas companies have also referred to increasing international crude oil prices. They have included global energy market conditions among the factors supporting their requests.
Changes in international energy prices can affect the cost of imported fuel. These costs may influence the overall financial requirements of gas distribution companies.
The proposed increases could affect the average gas prices charged by the two utilities. However, the requested rates have not yet received regulatory approval.
OGRA to Review Proposed Gas Prices
OGRA will examine the applications submitted by SNGPL and SSGC. The regulator is expected to conduct hearings before reaching a final decision.
During the review process, the authority will consider the companies’ financial requirements and supporting calculations. It will then decide whether the proposed gas price increases should be approved.
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Consumers will have to wait for OGRA’s decision to know whether the requested revisions will take effect. Until the regulatory process is completed, the proposed rates remain requests rather than approved prices.
