Govt Approves Hike in Gas Prices

The Oil and Gas Regulatory Authority (OGRA) has approved a 6.6 percent increase in prescribed gas prices to collect an additional Rs. 890 billion in tax revenue from consumers next fiscal year. OGRA has now set the revenue requirement for SSGCL at Rs. 354 billion and Rs. 535 billion for SNGPL. With average consumer gas prices currently at Rs. 1,770 per mmBtu, a price increase of Rs. 125 per unit would be required from July 1 to align with the higher cost structure of SNGPL. Under existing policy, the government must adopt the higher per unit prescribed price of Rs. 1,895 in this case for a uniform consumer tariff nationwide. The differential between this uniform tariff and the lower prescribed rate for SSGCL will be treated as Gas Development Surcharge. OGRA has forwarded this to the federal government for final category-wise pricing decisions as per Section 8(3) of the OGRA Ordinance. The government may revise the consumer-end prices without affecting the revenue benchmarks set by OGRA.