Friday, March 31, 2023

Ogra allows increase in gas price for Sui companies

In a late-night decision, the Oil and Gas Regulatory Authority (Ogra) on Tuesday approved increases of 14%, or Rs87 per unit, and 7%, or Rs55 per unit, on the average prescribed price of natural gas for Sui Northern Gas Pipeline Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGCL) to meet revenue shortfalls during the current fiscal year (FY22).

The regulatory board, in accordance with Section 8(1) of the Ogra Ordinance, 2002, has calculated the Estimated Revenue Requirement of SNGPL and SSGCL for FY22 in decisions dated August 17, 2021.

Both judgments have been forwarded to the federal government in order for it to receive category-specific natural gas sale price recommendations, as required by Section 8(3) of the Ogra Ordinance.

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The following is a summary of SNGPL’s revenue need determination in comparison to that authorized by Ogra for FY 2021-22: The financial effect of SNGPL’s previous year’s deficit of Rs254,108 million, i.e. Rs669.75 per mmBtu, has been directed to the federal government for an appropriate policy decision and, as a result, is not included in the current determination.

The following is a comparison of SSGCL’s demand and that authorized for FY22: The Ogra has decreased the gas firms’ requests for price increases in FY22. Furthermore, in light of the significant backlog of gas connections in the gas utilities’ system, as well as several unfinished development projects, the authority has instructed Sui firms to proceed with the installation of all ongoing or unfinished projects, as previously authorized.

In the case of SSGCL, the firm has been explicitly ordered to move promptly, effectively, and rigorously against a substantial number of gas pilferers/non-consumers located in its franchise area, in order to reduce its ever-increasing UFG.

The federal government has been asked for guidance on category-specific sale pricing as a result of the aforementioned determination. Any revisions recommended by the federal government will be communicated to Ogra. Until then, the present category-based natural gas selling pricing will apply.

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