ISLAMABAD: Pakistan’s two major gas utilities have sought significant increases in prescribed tariffs for FY2026-27, with requested hikes ranging from 21% to as high as 121%, prompting the Oil and Gas Regulatory Authority (Ogra) to convene public hearings later this month.
Ogra will hold hearings on May 12 in Lahore and May 13 in Karachi to review petitions filed by Sui Northern Gas Pipelines Limited and Sui Southern Gas Company Limited. Earlier hearings scheduled for April were postponed due to volatility in global LNG prices amid the Middle East crisis.
An independent consultant, KPMG Taseer Hadi & Co, has recommended a gradual reduction in unaccounted-for-gas (UFG) losses over five years. The proposed UFG allowance would decline to 6.5% in FY27 and further to 5.5% by FY31. However, SNGPL and SSGCL would receive additional allowances, taking their effective UFG limits higher in the initial years.
Currently, system loss allowance stands at around 7.6%, while actual losses remain higher—8.8% for SNGPL and 13.6% for SSGCL—highlighting inefficiencies in the distribution network.
The consultant also pointed out gaps in the regulatory framework, particularly the absence of a clear benchmark for RLNG losses. This has led to higher RLNG prices, increasing costs for consumers by nearly Rs1,500 per mmBtu.
Under existing legal requirements and commitments to the International Monetary Fund, the government must notify revised gas tariffs before July 1 to prevent further accumulation of circular debt, which has already crossed Rs3 trillion.
SNGPL has specifically proposed increasing its prescribed price from Rs1,853 to Rs2,084 per mmBtu, factoring in LNG diversion costs.
Story by Khaleeq Kiani
