ISLAMABAD: Households already grappling with inflationary pressures in Pakistan will face further financial strain as the Oil and Gas Regulatory Authority (OGRA) sanctioned a substantial increase in gas tariffs. Sui Northern Gas consumers will bear a 50% surge, while Sui Southern Gas consumers will face a 42% hike on average.
For Sui Northern Gas consumers, the additional cost will amount to Rs415.55 per Metric Million British Thermal Unit (MMBtu), whereas Sui Southern Gas consumers will experience an increase of Rs417 per MMBtu. This move comes in the wake of the federal cabinet’s approval of a significant electricity base tariff hike last week, ranging from Rs3.50 to Rs7.96 per unit, as part of Pakistan’s efforts to meet the stringent conditions of the $3 billion IMF stand-by arrangement.
Previously, the National Electric Power Regulatory Authority (NEPRA) recommended an increase of Rs4.96 in power base prices, which would burden consumers with an additional cost of Rs3,495. Now, with the approval of the gas price hike by OGRA, the government is set to issue a notification to implement these increases, aligning with IMF’s directive to bridge the gap between the cost and revenue while phasing out consumer subsidies.
Gas Price After Tariff Hike
Upon notification, the per MMBtu price for Sui Northern consumers will rise to Rs1,238.68, and for Sui Southern consumers, it will reach Rs1,350.68. The tariff hike is set to take effect from July 1, impacting all categories of consumers, including domestic, commercial, and industrial.
OGRA determines oil and gas prices based on recommendations from distribution companies under sections 3 and 8 of the OGRA Ordinance, subsequently forwarding the matter to the government for final approval. The proposal for the price increase was sent to the government in June after determining the revenue needs for the year 2023-24, and now with OGRA’s approval, the government will notify the new gas tariffs accordingly.
