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Natural gas

Pakistan's Gas Price Hike Proposal Sparks Outrage, Regulatory Relief

Strategic Insights

— 1 min read

Pakistan's citizens are set to bear the brunt of a significant gas price hike, with SNGPL demanding a record increase of Rs291 per MMBTU. The proposal, made during a public hearing chaired by OGRA Chairman Masroor Khan, has been met with strong opposition from industrial consumers and participants, who deem it an unbearable assault on businesses and households. Despite the Chairman's reassurances, concerns linger about the potential impact on inflation and the financial crisis plaguing ordinary Pakistanis. Meanwhile, the government is considering lifting the ban on new Sui gas connections, a move that could bring relief to millions of households and businesses.

Key Takeaways:

  • SNGPL has proposed a record gas price hike of Rs291 per MMBTU, which has sparked outrage among industrial consumers and participants.
  • The proposed hike has been met with strong criticism, with many calling it an unbearable burden on businesses and households.
  • OGRA Chairman Masroor Khan has hinted at providing relief to consumers, citing a Rs. 57 billion reduction in Sui Southern's demands and a rejection of Rs. 141 billion revenue requirements overall.
  • The ban on new Sui gas connections, in place since 2009 and reinstated three years ago, may be lifted, pending government approval.
  • Over 100,000 new connections may be issued in the fiscal year 2025-26 as part of broader IMF-linked energy reforms.
  • OGRA has raised fixed gas charges by 50% for protected users and up to 200% for high-consumption households.

Statistics:

  • SNGPL's proposed gas price hike of Rs291 per MMBTU.
  • 3.5 million applications for new Sui gas connections have been pending since the ban.
  • Rs. 57 billion reduction in Sui Southern's demands.
  • Rs. 141 billion revenue requirements overall rejected.
  • 50% increase in fixed gas charges for protected users.
  • 200% increase in fixed gas charges for high-consumption households.

Sources:

  • Pakistani government
  • SNGPL (Sui Northern Gas Pipelines Limited)
  • OGRA (Oil and Gas Regulatory Authority)
  • Finance Ministry
  • IMF (International Monetary Fund)

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