SSGC wants to Raise Gas prices by 15.38% in the current Fiscal year

The gas utility based in Karachi requests in a letter to OGRA that the rate be revised to Rs1,696.39 per MMBtu.

ISLAMABAD According to a report published  on Wednesday, the Sui Southern Gas Company (SSGC) is attempting to counteract the rising costs of gas and other components by requesting a 15.38% increase in gas prices for the current fiscal year.

SSGC has requested that the rate be revised from the current Rs1,470.21 per MMBtu to Rs1,696.39 per MMBtu, an increase of Rs226.18 per MMBtu, effective July 1 of the current fiscal year, in a petition submitted to the Oil and Gas Regulatory Authority (OGRA).

The company estimates that it will need Rs47.773 billion in revenue for FY24 in its petition to OGRA.

The cost of gas makes up the majority of the average prescribed price—more than 85% of the determined price.

The gas utility based in Karachi emphasizes that, in accordance with agreements between the federal government and gas producers, the price of gas is correlated with the global price of crude oil or fuel oil. Furthermore, for FY2023–2024, SSGC estimated that the cost of RLNG’s service would be Rs48.8 per MMBtu.

Notably, the company’s petition calls for recovering Rs95.40 per MMBtu from customers to offset revenue shortfalls from the province of Balochistan and Rs13.45 per MMBtu for the LPG air-mix projects.

Concurrently, SSGC has submitted a second petition to amend domestic (system gas & RLNG) customers’ security deposits.

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The petition puts forth the company’s proposal to amend the gas supply deposit (GSD) by basing it on the three months with the highest annual consumption.

The shortfall in domestic consumers’ gas supply deposits will be recouped over the course of six months in equal installments.

According to the petition, only 1.697 million, or 53%, of the 3.186 million domestic consumers are currently protected by their gas supply deposit.

A GSD shortfall of Rs9.579 billion exists compared to the required GSD of Rs15.019 billion, meaning that 1.426 million domestic consumers are unsecured.

OGRA has invited feedback on these petitions from all parties involved, including the general public and gas consumers.

The petition will be the subject of a public hearing in Karachi on December 18, 2023, when the regulatory body will set the gas prices.