Government maintains gas prices for fiscal year 2024-25

Gas consumers across the country will not see a decrease in prices for the new fiscal year, as the government has decided not to implement the proposed tariff cuts by the Oil and Gas Regulatory Authority (Ogra). Instead, the prices of liquefied petroleum gas (LPG) have been increased starting July 1, 2024.

The domestic LPG cylinder price has gone up by Rs1.43 per kilogramme. Ogra had suggested a reduction in gas prices by up to 10% for public utilities, but the government opted to maintain the current prices for the fiscal year 2024-25.

Simultaneously, gas prices for general industry (Captive) have been raised by Rs250 per million British thermal units (MMBTU), setting the new tariff at Rs3,000 per MMBTU, up from Rs2,750 per MMBTU. Ogra has highlighted that the federal government holds the authority to determine gas sale prices based on socio-economic factors and sectoral policies.

Ogra's recommendations included a prescribed price of Rs1,635.9 per MMBTU for Sui Northern Gas Pipelines Limited (SNGPL), indicating a 10% decrease, and Rs1,401.25 per MMBTU for Sui Southern Gas Company (SSGC), reflecting a 4% reduction. The regulator also addressed the financial impacts of revenue shortfalls from previous years, adjusting prices to balance surpluses.

Moreover, Ogra has instructed SSGC and SNGPL to implement cost-cutting measures, enhance recoveries from defaulters, and tackle issues such as unaccounted-for gas (UFG) and low gas pressure complaints. The companies have been directed to comply with regulations, finalize agreements, and optimize human resources to adapt to evolving business dynamics.

In a separate development, Ogra has announced an increase in LPG prices, with the domestic cylinder price rising by Rs1.43 per kilogram. The producer price of LPG has also been adjusted based on the Saudi Aramco-CP and US dollar exchange rate.

While gas prices remain unchanged for the fiscal year 2024-25, the decision to increase LPG prices and adjust industry tariffs reflects the government's strategy to balance economic considerations and sectoral requirements. Ogra's directives to enhance operational efficiency and address financial challenges signal a proactive approach towards ensuring sustainable gas supply and pricing mechanisms in the country.