SNGPL appeals for gas price hike amidst revenue shortfall projections

WEB DESK: Sui Northern Gas Pipelines Limited (SNGPL) has formally requested the Oil and Gas Regulatory Authority (OGRA) for an upward revision in its average prescribed gas price, proposing an increase of Rs506.35 per MMBTU, effective July 1, 2023.

The motivation behind this appeal lies in the company’s anticipation of a revenue shortfall amounting to Rs179.16 billion.

In a press release disseminated today, OGRA disclosed the deliberation of SNGPL’s petition, focusing on the scrutiny of its estimated revenue requirement and prescribed prices for the upcoming fiscal year 2023–24.

Noteworthy within the revenue shortfall is a sum of Rs697 million linked to the LPG Air-mix project for FY 2023–24.

The sought-after surge in gas prices encompasses the expenses associated with RLNG diverting molecules to domestic consumers, aligning with the Federal Cabinet’s decision dated October 30, 2023.

Additionally, the petitioner has factored in Rs427.83 billion to address the previous year’s deficit, leading to an aggregate prescribed rate of Rs2,961.98/MMBTU, effective July 1, 2023.

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This adjustment aims to offset the escalating costs of gas, RLNG, and other components outlined in the petition.

Further detailed in the submission is the RLNG cost of service estimated at Rs72.16 billion (equivalent to 293.07/MMBTU) for the financial year 2023–24.

In the spirit of transparency and public engagement, OGRA conducted a public hearing in Lahore, providing consumers, the general public, and interested or affected individuals with the opportunity to voice their opinions.

The authority will arrive at a final decision on the petition after carefully considering the perspectives of all stakeholders involved.