Ogra chief says gas tariff could go up

LAHORE: Talking about the possibility of a gas tariff hike, Oil & Gas Regulatory Authority (Ogra) Chairman Masroor Khan has said costly liquefied natural gas (LNG) is being imported as domestic reserves deplete.

Speaking at a public hearing on Monday on the Sui Northern Gas Pipelines Limited (SNGPL) petition for a review of its estimated revenue requirement and prescribed prices for the financial year 2023-24, he hinted at the likelihood of an upward revision in the gas tariff. “The prices of natural gas are increasing globally and its prices can also go up in the country,” he observed.

It is pertinent to mention that SNGPL, the petitioner, projected a shortfall in its revenue requirement at Rs. 179,160 million, including Rs. 697 million on account of the LPG air-mix project for FY 2023-24, seeking an increase in its average prescribed price by Rs. 506.35 per mnBtu effective July 1, 2023 including the cost of Regasified Liquefied Natural Gas (RLNG) diverted molecules to domestic consumers, as part of the cost of gas in the light of the decision of the federal cabinet on Oct 30, 2023. The petitioner has also included Rs.427,830 million against previous years shortfall, thereby seeking total average prescribed Rs.2,961.98/MMBTU with effect from 1st July, 2023 to compensate for the increase in the cost of gas/RLNG and other components of the petition. Besides, the petitioner has estimated the RLNG cost of service at Rs. 72,160 million (i.e. 293.07/MMBTU) for FY2023-24. Therefore, the OGRA conducted the public hearing to provide an opportunity of hearing to consumers/general public and interested/affected persons. The final decision on the petition would be issued by the authority after considering viewpoints of all stakeholders.

The OGRA chairman said the next hearing would be held in Peshawar and after reviewing the viewpoints of all stakeholders, the authority would submit recommendations to the government for further action, noting that the government ultimately determines any changes in gas prices. He, however, assured that consumer interests always remain a top priority for the regulator. Masroor Khan was of the view that the country’s gas reserves were on the decline. Consequently, he added, the government has to import expensive LNG, causing a burden on consumers. He stressed the need for addressing challenges to ensure the sustainability of the gas supply chain while considering the financial burden on people. He asked consumers to follow gas-saving practices, saying he personally tried to manage his household gas bills by adopting energy conservation practices.