The Oil and Gas Regulatory Authority (OGRA) has approved a gas tariff hike for consumers of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) for the fiscal year 2025–26.
OGRA has submitted its decision to the federal government, which is legally required to issue a formal notification of the revised category-wise gas prices within 40 days.
In its official statement, OGRA confirmed that, under Section 8(1) of the OGRA Ordinance, 2002, it determined the estimated revenue requirements (ERR) for both gas utilities through decisions issued on May 20, 2025. These determinations have now been forwarded to the federal government for advice on the revised sale prices, as mandated by Section 8(3) of the same ordinance.
SSGCL had proposed an increase in the average prescribed gas price to Rs 2,398.90 per MMBTU. However, OGRA approved a smaller hike of Rs 103.95 per MMBTU. Currently, SSGCL’s average prescribed price is Rs 1,762.51 per MMBTU.
Similarly, SNGPL had sought an increase of Rs 707.37 per MMBTU, but the regulator sanctioned a raise of only Rs 116.90 per MMBTU. The primary driver behind the proposed increase is the rising cost of re-gasified liquefied natural gas (RLNG) diversion, in line with a federal cabinet decision from October 30, 2023.
Given the consistent rise in RLNG diversion and its impact on pricing, OGRA directed SNGPL to engage with the federal government for a thorough review of gas supply management strategies. The review should factor in sectoral energy needs, international contractual commitments, and broader macroeconomic conditions.
OGRA clarified that until the federal government formally issues the revised sale prices, the existing gas tariffs for each consumer category will remain unchanged.
SNGPL attributed declining domestic and commercial gas usage to previous price hikes that have altered consumption behavior. Elevated RLNG rates, higher system gas tariffs, and new levies on captive power plant (CPP) users have driven many industrial consumers to shift towards the national electricity grid or alternate energy sources.
Furthermore, gas offtake by the power sector has dropped dramatically—from 66% to 33%—over the past few years. This 150 MMCFD decline is largely due to a growing shift towards solar energy and other alternative fuels that reduce reliance on costly RLNG.
SNGPL also noted that indigenous gas supply cuts are linked to around 1,000 MMCFD of RLNG locked in firm intergovernmental agreements. Not fulfilling these commitments could trigger hefty take-or-pay (TOP) penalties and risk sovereign default.
Meanwhile, demand for RLNG has fallen, particularly from CPP users and the power sector. Curtailment of local gas supplies continues in order to maintain system integrity amid shifting energy demand.
