People are facing tough times with high bills and rising prices due to another increase in gas prices by the Oil and Gas Regulatory Authority (Ogra), aiming to cover a shortfall of Rs98 billion. This new pricing will be applied from January 1 to June 30, marking the second hike in gas prices for the current financial year 2023-24.

The government raised the rates for Sui Northern Gas Pipelines Limited (SNGPL) by 35.13% and Sui Southern Gas Company Limited (SSGCL) by 8.57%. Ogra suggested a 23.16% average increase in the prescribed gas price to Rs1,590 per MMBTU, effective from January 1, compared to the previous price of Rs1,291 per MMBTU set on June 2, 2023.

To address circular debt, currently at Rs1,250 billion, the International Monetary Fund (IMF) recommends the government implement gas price reviews twice a year. Ogra is mandated to announce gas tariffs biannually, with the government enforcing prices from July 1 and January 1 each financial year.

As of February 2, Ogra’s decisions showed Sui Northern gas tariff increased to Rs1,673.82 per MMBTU from Rs1,238.68, while Sui Southern’s tariff rose to Rs1,466.40 per MMBTU from Rs1,350.68. If the government does not respond to Ogra’s determination within 40 days, the regulator’s tariff will automatically be enforced.

The caretaker government aims to decide on further gas price increases by mid-February. In June 2023, Ogra had announced a 50% increase for Sui Northern Gas consumers and a 45% increase for Sui Southern Gas consumers, effective from July 1, 2023. The caretaker government had previously raised gas prices by 193% from November 1, 2023, with an expected revenue tariff of Rs980 billion for FY24.

However, due to low gas production in the Sui Southern system, the revenue fell short at Rs802 billion, creating a Rs98 billion deficit. This deficit is planned to be covered by an average 23.16% increase in gas prices for both companies.

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