Gas Tariff Hike Plan Could Raise Bills From July 1

ISLAMABAD: Pakistan’s gas consumers may face another major price shock as the country’s two main gas utilities have sought sizeable increases in prescribed tariffs for the next financial year. The development comes as the Oil and Gas Regulatory Authority prepares public hearings on the petitions, with any approved adjustment expected to influence gas prices from July 1.

Sui Northern Gas Company Limited and Sui Southern Gas Company Limited are seeking tariff increases of about 21 per cent and 121 per cent, respectively, to meet their projected revenue requirements for 2026-27. The requests come at a sensitive time for households, industries and businesses already dealing with high energy costs and wider inflationary pressure.

Ogra has scheduled public hearings for May 12 and May 13 in Lahore and Karachi to examine the utilities’ petitions. The regulator had earlier delayed the hearings because imported LNG prices had become uncertain amid the continuing Middle East crisis, but legal timelines require Ogra to complete its determination before the end of June.

A consultant hired by the regulator has also proposed a gradual reduction in the allowance charged to consumers for unaccounted-for-gas losses. Under that proposal, the loss allowance would be brought down over five years, with separate additional margins suggested for SNGPL and SSGCL because of local operational challenges.

The issue is directly tied to Pakistan’s long-running gas-sector crisis. Circular debt in the sector has already crossed Rs3 trillion, and the government has committed to the International Monetary Fund that it will issue timely gas-rate notifications twice a year to prevent further debt accumulation.

For consumers, the debate is not only about company revenue needs but also about how much system inefficiency should be passed on through bills. Unaccounted-for-gas losses include leakage, theft, measurement gaps and operational losses, and critics have long argued that consumers should not be forced to absorb the full cost of weak infrastructure and poor recovery.

SNGPL has requested that its prescribed price be raised from Rs1,853 per million British thermal units to Rs2,084 for the next fiscal year, including costs linked to diverted LNG. SSGCL’s petition is far steeper, reflecting larger revenue gaps and higher losses in its system compared with the northern utility.

The broader economic impact could be significant if the regulator accepts the petitions and the government allows the hikes to flow into consumer tariffs. Higher gas costs would affect domestic bills, industrial production, fertiliser, textiles, commercial kitchens and small businesses that depend heavily on fuel for daily operations.

The next major step will be the public hearing process, where utilities, industry representatives, consumer groups and government officials are expected to present their positions. Ogra’s final determination will shape the government’s pricing decision and could become one of the most closely watched energy-sector moves before the new fiscal year begins.