ISLAMABAD: The Oil and Gas Regulatory Authority approved late Friday a more than 40% increase in the natural gas prices and sent the recommendation to the federal cabinet for approval in order to meet the revenue requirements of SNGPL and SSGCL for the financial year 2022-23.

“The financial impact of previous years’ shortfall of Rs264.894 million ie Rs720.20 per million British thermal units (MMBtu) has been referred to the federal government for an appropriate policy decision and is, therefore, not made part of the instant determination,” said the statement.

The development comes after an Rs30 increase in the price of petrol by the government on Friday. Finance Minister Miftah Ismail, who announced the decision in a press conference, said the decision was taken in view of the rising petrol prices in the global market. But, the PTI claimed that the government was “incompetent” and afraid of buying Russian oil due to the fear of the United States.

Ogra has approved up to 45 per cent increase in gas price for Punjab and Khyber Pakhtunkhwa and around 44 per cent rise for Sindh and Balochistan. Both determinations have been sent to the federal government for receipt of category-wise natural gas prices.

SNGPL

The regulator has set an average prescribed for Sui Northern Gas Pipelines Limited at Rs854.52/MMBtu, up by Rs265 per unit or 45% higher than the company’s demand for a 198% (Rs1,079 per unit) increase in its prescribed price of Rs1,623/MMBtu to secure about Rs597 billion of revenue. But the regulator allowed annual Rs260 billion revenue, showing an increase of 45%.

SSGCL

Moreover, Ogra kept an average prescribed price for SSGCL at Rs699.30/MMBtu, a 44% or Rs308 per unit, on the demand of the company. It approved the company’s revenue requirement for the fiscal year at Rs285.2 billion against the SSGCL’s demand of around Rs287 billion.

“Federal government has been requested for advice on category-wise sale prices. Any revision, as advised by the federal government, shall be accordingly notified by Ogra. Till such time the existing category-wise natural gas sale prices shall continue to prevail,” it added.