Proposed Gas Price Increase for FY 2025-26

The anticipated average prescribed gas price for the fiscal year 2025-26 is projected to be Rs 2,485.72 per MMBTU. A significant portion, approximately 51%, of this increase is attributed to the reallocation of expensive Re-gasified Liquefied Natural Gas (RLNG) to supply the system’s gas consumers.

This shift has largely occurred due to a decrease in power demand for the initially committed RLNG volumes. Reduced consumption by Captive Power Plants (CPPs) has further contributed to this reallocation, as CPPs are transitioning to the Power Grid under a policy aimed at improving Power Capacity Utilization.

An additional 39% of the price hike stems from the accumulation of Late Payment Surcharge (LPS) related to gas creditors (circular debt), which the Oil and Gas Regulatory Authority (OGRA) has typically not permitted for inclusion in the prescribed price.

Notably, operational costs constitute only about 4-6% of the company’s total revenue requirements.

According to a press statement from Sui Northern Gas’s media affairs department, the remaining minor fraction of the price increase encompasses operating expenses, the addition of vital assets, and depreciation. These factors are all considered crucial for preserving operational sustainability and guaranteeing a consistent and dependable gas supply.