ISLAMABAD: Pakistan’s two state-owned gas utilities — Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) — have sought a 5% increase in gas prices for fiscal year 2026, citing rupee depreciation, higher RLNG diversion, and increased repair and maintenance expenses.
In their revised estimated revenue requirements (RERR) submitted to the Oil and Gas Regulatory Authority (Ogra), both companies requested a marginal hike in domestic gas tariffs to offset foreign exchange fluctuations and operational pressures. The utilities based their requests on an exchange rate assumption of Rs284 per US dollar, up from Rs280, and a cost of gas increase from Rs1,533 to Rs1,547 per MMBtu.
The petitions also propose a rise in the prescribed price (excluding prior year impact) from Rs1,793 to Rs1,886 per MMBtu, while the price including prior year impact recovery (PYI) is sought at Rs1,958 per MMBtu.
The gas companies attributed the need for higher tariffs to multiple factors, including a 65% surge in RLNG diversion year-on-year due to lower off-takes by the power sector and a shift of captive power plants to the national grid. The RLNG diversion estimate stands at 81,303 BBTUs, about 2% higher than Ogra’s earlier FY26 estimates.
SNGPL reported that gas supply to the power sector has declined by 150–200 mmcfd from the committed demand of 550 mmcfd, while captive consumption has dropped from 190 mmcfd to 60 mmcfd. The company forecasts 269 mmcfd of gas suspension during FY26, with the bulk of curtailment expected in the second half of the year.
SSGC, meanwhile, has requested Rs34 billion under prior year adjustments (PYA) and highlighted rising transmission and distribution (T&D) costs, mainly for infrastructure rehabilitation in flood-affected regions and new RLNG connections.
Despite the utilities’ requests, analysts at Optimus Capital Management expect the actual gas price increase to remain minimal or nil, as Ogra typically disallows several cost components — including finance costs, unaccounted-for gas (UFG) disallowances, prior year adjustments, and Balochistan’s revenue shortfall.
The companies’ submissions also reflect a decline in average gas volumes, from 495,545 BBTUs last year to 471,976 BBTUs, along with slightly lower international oil price projections — down from $75 to $73 per barrel.
Ogra is expected to review the petitions and announce its decision on the revised gas prices for FY26 in the coming weeks.
Story by Wasim Iqbal
