SNGPL to hike gas prices to tackle financial strain

ISLAMABAD: Sui Northern Gas Pipelines Limited (SNGPL) has decided to raise gas prices by 39 per cent to ensure continued supply and address financial pressures.

The 39 per cent of the increase comes from unpaid dues and late payment charges, which SNGPL says it now wants to recover. This issue falls under the broader problem of circular debt in the energy sector.

The price hike also comes as captive power plants (CPPs) reduce gas consumption, following government advice to shift to the national electricity grid.

According to SNGPL’s press release, the main reason behind this increase is the supply of expensive imported gas (RLNG) to domestic consumers.

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Nearly 51 per cent of the price hike is due to this costly gas being diverted to household users because power plants and industries are using less gas.

The government has also directed captive power plants to shift to the electricity grid, which reduced gas consumption further.

SNGPL clarified that only 4 to 6 percent of its income goes toward running its operations. The rest of the hike includes expenses for new equipment, repairs, and keeping the gas supply running smoothly.

The final decision on the proposed rates will be made by the Oil and Gas Regulatory Authority (OGRA).