The Oil and Gas Regulatory Authority (Ogra) conducted a public hearing in Lahore on Monday over the proposed rise in gas pricing. This is the third increase in the current fiscal year, requested by Sui Northern, with a significant jump of up to 147%.
The Sui Northern has requested an increase of Rs2,646.18 per mmbtu, resulting in a new average price of Rs 4446.89. This proposal comes after estimating a revenue gap of Rs189.18 billion. The next hearing is planned on Wednesday (March 27) in Peshawar.
If the proposal is granted, it will result in an escalation of gas prices for consumers in Punjab. The application of Khyber Pakhtunkhwa and Islamabad will commence on July 1.
Following the conclusion of the hearing, Ogra officials stated that there is no need to increase gas prices based on the demand from Sui Northern. They mentioned that a final decision would be made after finishing the public hearings and considering the complaints.
The Lahore Chamber of Commerce and Industry (LCCI) and the All Pakistan Textile Mills Association (APTMA) have denounced the plan as a cruel measure and have resolved to vehemently oppose it during the hearing.
According to LCCI Vice President Adnan Butt, the gas prices in Pakistan are already significantly higher than those in other countries. He warns that any additional increase in prices would lead to the closure of enterprises.
Similarly, the APTMA believes that the Sui Northern officials should be questioned about their performance, and there should be a reduction in gas and power rates.
Last week, the Oil and Gas Regulatory Authority (OGRA) conducted public hearings in Karachi and Quetta. The Sui Southern Gas Company (SSGC) submitted a proposal to OGRA, asking for an increase of Rs 324.3 per million British thermal units (mmbtu) in the average price of natural gas, which currently stands at Rs 1416.50 per mmbtu. If approved, this rise is estimated to impose an additional cost of Rs 79.63 billion on customers.
The proposal for the next financial year has projected a total income shortfall of Rs79.63 billion. Out of this amount, Rs56.69 billion is attributed to domestically generated gas, while Rs22.93 billion is tied to RLNG.
Following the hearings, a conclusive determination will be transmitted to the federal government. If Islamabad gives its approval, Ogra will release a notification to raise the gas rates.
