SNGPL and SSGCL demand up to 220% increase in Gas prices

The prescribed gas price rises of up to 220% in the fiscal year 2014 were requested by Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL), reports the Dawn News.

In order to meet the estimated revenue demand (ERR) for the fiscal year 2021-22, the two gas utility companies requested an increase effective 1 July 2021.

SNGPL has announced an increase of Rs 1.416 per million British spa units for its next fiscal year by formal applications to the Oil and Gas Regulatory Authority (OGRA) (MMBtu). This includes the excellent recovery of approximately Rs 670 per unit in the previous year.

The company requested an added revenue requirement of Rs $367 billion, including a deficit in revenue of Rs $254 billion for the last year, according to the OGRA statement. SNGPL also requested a further increment of Rs. 137.5 for each unit, as a re-gasified natural gas service cost (RLNG).

The current SNGPL price is approximately Rs. 645 per MMBtu. The resulting prices would be 220% higher if the requested increase is accepted by OGRA, at almost Rs. 2,160 per MMBtu.

Similarly, for the following fiscal year, the SSGCL based in Karachi claimed an increase of Rs. 153 or 20 percent for each price unit. This would mean an increase from approximately Rs 779 per unit to approximately Rs 932 per unit when OGRA approves the walk.

In its statement, OGRA showed that SSGCL was able, for next year, to deliver on a shortfall of approximately Rs. 35 billion in revenue for its gas and operating costs, and no returns on the assets of approximately Rs. 252 billion. This means that the prescribed price will increase by Rs. 110 per unit.

The RLNG service cost of Rs. 16.7 billion or 43.38% was also estimated by SSGCL per unit.

On request, OGRA has requested the input of stakeholders. Whether the price increase is going to be approved for now is not clear.

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