Domestic gas consumers are expected to incur a cost of Rs163.058 billion this financial year due to the RLNG diversion cost. Sui Northern Gas Pipeline Limited (SNGPL) has requested the Oil and Gas Regulatory Authority (OGRA) to approve a further increase in the gas price by Rs64.16 per MMBTU for the fiscal year 2024-25.
In a petition filed on October 15, 2024, SNGPL projected a revenue shortfall of Rs20.582 billion for FY 2024-25, which includes Rs489 million related to the LPG Air Mix project. The company is seeking to set the average prescribed price of gas at Rs1711.73 per MMBTU for all consumer categories starting July 1, 2024, with the RLNG supply cost pegged at Rs279.87 per MMBTU.
The petition highlights the costs associated with RLNG diverted for domestic gas consumers, as mandated by a decision from the Economic Coordination Committee (ECC) ratified by the federal government on October 30, 2023. The gas pricing is tied to international prices for High Sulfur Fuel Oil (HSFO) and crude oil or Brent, in line with agreements made between Pakistan, Qatar, and ENI. SNGPL has claimed the RLNG cost of service for FY 2024-25 is Rs304.27 per MMBTU. OGRA is scheduled to hold a public hearing regarding this petition on November 5, 2024, at the SNGPL Headquarters in Lahore.
This petition for the Review of Estimated Revenue Requirement (RERR) for FY 2024-25 is based on the cost of gas, using actual data for July and August 2024. The calculations also incorporate well-head prices announced by OGRA for July to December 2024. For subsequent months, well-head gas prices have been estimated based on an exchange rate of Rs254.34 to one US dollar, with crude oil priced at $80.53 per barrel and HSFO at $437.1064 per metric ton from January to June 2025. For the earlier months, the exchange rate was Rs278.95 against the dollar, with crude oil priced at $83.67 per barrel and HSFO at $454.15 per ton.
SNGPL has projected a diversion of RLNG equivalent to 49,180 billion thermal units (BBTU) to be sold to system gas consumers at the system gas price during FY 2024-25, resulting in a total projected cost of Rs163.058 billion, which is included in the revenue requirement for domestic gas consumers. The RLNG input is based on an average of 10 cargos from the current annual delivery program. Due to reduced RLNG demand, particularly from the power sector, the company may have to shut down local well-heads to protect its pipeline infrastructure.
