Pakistan's two gas utilities have asked the regulator to raise their prescribed gas prices for the current financial year, with Sui Southern Gas Company (SSGC) seeking a far larger increase than its northern counterpart. Sui Northern Gas Pipelines Limited (SNGPL) and SSGC have filed separate petitions with the Oil and Gas Regulatory Authority (OGRA), which will hold hearings before deciding whether to approve the requests.

SNGPL has sought an increase of Rs10 per million British thermal units (MMBtu), which would take its average prescribed price to Rs1,712.40 from the existing Rs1,702. SSGC has requested a much steeper rise of Rs366.75 per MMBtu, seeking to lift its average prescribed price to Rs2,071.75. Both utilities want the increases to apply retrospectively from 1 July, the start of the financial year.

Why the utilities say they need more

The prescribed price is the average rate OGRA determines to meet a gas utility's estimated revenue requirement, covering the cost of buying gas, running the network and servicing past shortfalls. SNGPL has included Rs60.147 billion in liquefied natural gas (LNG) service costs in its proposed price, reflecting the expense of imported gas in its supply mix.

The petitions come as the government prepares a winter gas management plan for November 2026 to February 2027. Under the plan, domestic consumers would receive priority, while supplies to industry, captive power plants, fertiliser producers and compressed natural gas (CNG) stations could be curtailed if there are severe shortages or inadequate LNG deliveries.

Prescribed price is not the consumer tariff

It is important to note that a rise in the prescribed price does not automatically mean higher gas bills for households. The prescribed price sets what the utility needs to recover its costs; the consumer tariff is a separate decision, and the government has previously chosen to keep consumer tariffs unchanged even when OGRA's determinations moved.

In July, the government retained existing consumer gas tariffs despite OGRA setting lower prescribed prices for the two utilities for financial year 2026-27, at Rs1,718.96 per MMBtu for SNGPL and Rs1,691.24 for SSGC. That means the outcome of the latest petitions will depend on both OGRA's determination and the government's decision on consumer tariffs.

What happens next

OGRA has already issued notices of public hearings to consider SNGPL's review of its estimated revenue requirement and prescribed price for financial year 2026-27, dated 11 November 2026. The regulator will hear the utilities' cases before making its determination, and consumers will learn the effect on their bills only once OGRA rules and the government decides on tariffs.

For households heading into winter, when gas demand rises sharply for heating and cooking, the petitions are a reminder that the cost of gas supply remains under pressure, even though no change in consumer prices has been approved.

Sources: Islamabad Post and OGRA petitions page.