SNGPL supplies gas to KP and Punjab. The report outlines an estimated revenue requirement for FY24 at Rs 179.16 billion
- SNGPL’s projected gas prices stand at Rs 1,715.49 per MMBTu.
- The company is seeking a rate revision to Rs 2,961.98/MMBTu.
- SNGPL estimates the cost of RLNG’s service at Rs 72.16 billion.
ISLAMABAD: To address the looming revenue shortfall, Sui Northern Gas Pipeline Limited (SNGPL) is again demanding a significant 137% hike in average forecast gas prices of Rs 1,715.49 per MMBTu.
The state-owned company, responsible for supplying natural gas to Punjab and Khyber Pakhtunkhwa, has submitted a formal request to the Oil and Gas Regulatory Authority (Ogra) for the financial year 2023-24, seeking a price revision to Rs 2,961.98/ MMBTu, with effective July 1 of the current financial year.
The company’s report to Ogra outlines an estimated revenue requirement for FY24 at Rs 179.16 billion, including Rs 697 million earmarked for LPG air blending projects in Gilgit for the current financial year.
On this basis, SNGPL is seeking an increase in the average prescribed price of natural gas by Rs 506.35/MMBTu, with effect from July 1, 2023. Specifically it has incorporated the cost of regasified liquefied natural gas (RLNG) diverted to domestic consumers in the total cost of natural gas, in line with a decision of the Federal Cabinet on October 10, 2023.
In addition, the utility has factored in Rs 427.83 billion to offset shortfalls from previous years. To justify a 137.6% increase in average forecast prices to Rs 2,961.98/MMBTu from July 1, 2023, SNGPL cites the increase in the cost of natural gas/RLNG and other components described in its report.
Additionally, SNGPL has estimated the cost of RLNG service at Rs 72.16 billion (equivalent to Rs 293.07/MMBTu) for the current financial year. The company says the said report is subject to revisions based on actual cost data and sales figures for July and August 2023, resulting in a reduction in the domestic gas business’s deficit from Rs 181.516 billion to Rs 179.160 billion. .
The sector-wise revised shortfall and RLNG business cost for the financial year 2023-24 is detailed at Rs 179.160 billion for domestic natural gas businesses and Rs 427.830 billion for shortfalls from previous years. The total shortfall of domestic natural gas businesses, including previous years’ shortfalls, stands at Rs 606.990 billion, with an additional Rs 72.160 billion set as RLNG procurement cost, the report said.
Ogra has invited comments from all interested and affected parties, including gas consumers and the general public. A public hearing on the petition is scheduled for December 11, 2023, in Lahore, where the regulator will set gas prices.
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