Both companies want the proposed adjustments to take effect retrospectively from July 1, the beginning of the current fiscal year. However, OGRA will review their requests before making a final decision.
SNGPL and SSGC Propose Different Gas Price Increases
SNGPL has requested a relatively modest increase of Rs10.40 per million British thermal units (MMBtu). The company wants to raise its average prescribed gas price from Rs1,702 to Rs1,712.40 per MMBtu.
Meanwhile, SSGC has proposed a significantly larger adjustment of Rs370 per MMBtu. The company seeks to increase its average prescribed price to Rs2,071.75 per MMBtu.
The two applications outline different cost requirements and proposed adjustments. Nevertheless, both utilities have pointed towards rising energy costs as a reason for seeking higher rates.
SNGPL Includes Rs60 Billion in LNG Service Costs
SNGPL has also incorporated Rs60.147 billion in LNG service costs into its proposed gas pricing calculations.
According to its application, the company’s LNG cost would reach Rs471.16 per MMBtu. The utility has highlighted limited domestic gas availability during the winter season as a major supply challenge.
Consequently, SNGPL expects to arrange additional supplies to meet seasonal demand. The company estimates that it will require 16 LNG cargoes to fulfil these requirements.
The proposed arrangements aim to address the expected shortfall in indigenous gas supplies during winter. However, the additional LNG expenses have also contributed to the company’s pricing request.
Rising International Oil Prices Add to Gas Utilities’ Costs
Both SNGPL and SSGC have cited rising international crude oil prices among the factors behind their requests.
Higher international energy prices can increase the costs associated with gas procurement and supply arrangements. Therefore, the utilities have included these financial pressures in their applications to OGRA.
SNGPL has also highlighted the additional expenses associated with importing LNG to manage seasonal demand. These requirements form part of its proposed gas price calculations.
OGRA to Review Proposed Gas Price Adjustments
OGRA will now examine the applications submitted by SNGPL and SSGC before deciding on the proposed increases.
The regulator will conduct hearings to review the companies’ financial requirements and pricing proposals. These proceedings will help determine whether the requested adjustments receive approval.
For now, neither proposed increase represents a final approved change in gas prices. Consumers will have to wait for OGRA’s decision to know whether the requested rates will take effect.
If approved, the proposed adjustments could affect the prescribed gas prices for the current fiscal year, starting retrospectively from July 1.
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