ISLAMABAD: Facing mounting pressure from the International Monetary Fund (IMF), the government has no choice but to raise gas sale prices from July 1, in line with conditions to eliminate deficits in the country’s gas utilities.
Under the IMF-endorsed 2022 amendment, gas tariffs must be revised annually to ensure zero fiscal shortfall for Sui companies. As a result, a gas price hike is now imminent to address the Rs 40 billion deficit faced by Sui Northern Gas Pipelines Limited (SNGPL), according to a senior official in the Ministry of Energy.
The Oil and Gas Regulatory Authority (Ogra) has already issued its determination for FY26, recommending a Rs116.96 per MMBtu increase for SNGPL consumers and a Rs103.95 per MMBtu decrease for Sui Southern Gas Company (SSGC) consumers. Despite the differential pricing, the government is aiming to implement a uniform nationwide gas tariff, with final decisions pending on which consumer categories will face higher, lower, or no increase.
Top officials of the Petroleum Division are set to begin deliberations this week, with a deadline of 40 days to implement new prices after Ogra’s determination.
SSGC, which gained Rs34 billion in Ogra’s decision, will use the amount to offset previous losses totaling Rs400 billion from 2013 to 2020, largely due to past governments’ failure to adjust prices. Meanwhile, SNGPL continues to grapple with Rs40 billion in recent losses and Rs900 billion in historical liabilities, including the cost of diverted LNG supplies.
Combined, the prior year losses of both utilities stand at a staggering Rs1.3 trillion, making tariff adjustments unavoidable under IMF reforms.
Story by Khalid Mustafa
