SNGPL Seeks 39% Gas Price Hike to Maintain Supply
The price hike is expected to have a significant impact on consumers, with many already struggling to pay their gas bills. The SNGPL's proposal has sparked a heated debate, with consumers arguing that the increase will further burden them, while the company maintains that it is necessary to ensure the sustainability of the gas sector.
Sui Northern Gas Pipelines Limited (SNGPL) has proposed a 39% increase in gas prices to ensure uninterrupted supply and meet financial obligations, citing the need to cover expensive RLNG supply costs and operating expenses.
The proposed price hike includes a 51% increase due to the costly RLNG supply to domestic consumers, while the remaining 39% is attributed to the accrual of Late Payment Surcharge (LPS) against gas creditors. The operating cost accounts for only 4-6% of the total revenue requirements of the company. SNGPL has requested the Oil and Gas Regulatory Authority (OGRA) to approve the price increase and lift the ban on issuing new domestic connections.
During a public hearing at the SNGPL headquarters, the company argued that the ban on regasified liquefied natural gas (RLNG) domestic connections was reducing its revenues, and the gas price hike is necessary to meet expenses on expansion projects. However, commercial, industrial, and domestic consumers strongly opposed the price increase, citing that people were already burdened and many commercial consumers had disconnected their gas connections.
The proposed average prescribed price of Rs 2,485.72 per MMBTU for FY 2025-26 has sparked concerns among consumers, who are already struggling with high energy costs. The outcome of the OGRA's decision on the proposed price hike and the lifting of the ban on new connections will be closely watched, as it will have significant implications for the gas sector and consumers in Pakistan.