The Oil and Gas Regulatory Authority (OGRA) on Monday reduced average prescribed gas sale prices for both Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) by up to 8 % and passed on about Rs 60 billion of past adjustments to consumers.
The Oil and Gas Regulatory Authority (OGRA) has approved a reduction in the average prescribed gas price for the upcoming 2025-26 fiscal year, slashing rates by 3 % for SNGPL and 8 % for SSGCL. The decision also wraps in an approximately Rs 60 billion adjustment to clear earlier shortfalls and outstanding stock of circular debt.
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According to its statement, OGRA reviewed the revenue requirement of both gas utilities and rationalised costs and revenues while factoring in the impact of deferred cargoes in the case of Pakistan LNG Limited for the benefit of gas consumers. Under the revised framework, the average prescribed price has been provisionally set at Rs 1,804.08 per MMBTU for SNGPL and Rs 1,549.41 per MMBTU for SSGCL. OGRA will forward the category-wise sale prices to the federal government for notification, after which the new tariffs will be formally announced.
In their petitions, SNGPL had sought a hefty increase of 28.6 % (Rs 505.64/MMBTU) raising its average prescribed price to Rs 2,272.14 per MMBTU. SSGCL had sought a 21.8 % hike (Rs 361.87/MMBTU) lifting its average to Rs 2,020.42 per MMBTU. Both companies attributed the shortfalls to rising cost of RLNG, operating expenses, depreciation and system inefficiencies.
For SNGPL, the requested uplift included Rs 189/MMBTU for indigenous gas and Rs 316.64/MMBTU for RLNG cost services. SSGCL’s request included Rs 125.41/MMBTU for indigenous gas, Rs 178.59/MMBTU for past shortfall recovery and Rs 57.87/MMMBTU for RLNG services. The revision approved by OGRA falls well short of the requests.
The adjustment also means that Rs 13,565 million has been absorbed for SNGPL and Rs 47,315 million for SSGCL against the previous shortfall and stock of gas circular debt, in line with a Federal Cabinet decision of July 01 2024. The regulator said this aligns with its mandate to protect consumers’ interest and promote fiscal discipline.
Historically, Pakistan’s gas sector has grappled with circular debt, high RLNG import costs and delayed tariff revisions — which have often resulted in large accumulated deficits for the pipeline companies. The reduction comes amid broader energy sector pressures as the government seeks to balance affordability for consumers, viability for utilities and adherence to IMF-linked reform commitments.
With the new framework now pending formal notification, current category-wise gas sale prices remain operative until the federal government advises revised rates. The step defined by OGRA could ease consumer burden short term, although longer-term pressures remain as imported gas costs and rupee depreciation continue to pose risks. The outlook for the gas sector will be shaped by global LNG prices, domestic demand growth and regulatory reforms.
