By Staff Reporter
ISLAMABAD: Pakistan’s two state-run gas distributors have asked the energy regulator to raise the average prices they are allowed to charge for the current fiscal year, with the increases taking effect retroactively from July 1, just as Qatar has extended its force majeure on LNG deliveries to Pakistan until December 29.
Sui Northern Gas Pipelines Ltd. is seeking an increase of Rs10.40 per million British thermal units, which would lift its average prescribed price to Rs1,712.40 from Rs1,702. Sui Southern Gas Co. is asking for a rise of Rs366.75 per million Btu, taking its price to Rs2,071.75. The petitions were filed separately with the Oil and Gas Regulatory Authority. SNGPL supplies Punjab and Khyber Pakhtunkhwa, and SSGC serves Sindh and Balochistan.
SNGPL has built Rs60.147 billion of LNG service costs into its proposed price, and puts the cost of those services at Rs471.16 per million Btu. The company said limited domestic gas availability in winter will require additional supplies, and it estimates the season will need 16 LNG cargoes. Both utilities also pointed to higher international crude prices as a reason for increasing gas prices.
The requests follow a determination by the regulator earlier this year. OGRA set SNGPL’s prescribed price at Rs1,718.96 per million Btu and SSGC’s at Rs1,691.24 for fiscal 2026-27. In July, the government kept existing consumer gas tariffs in place. SNGPL’s new request is therefore below the regulator’s own figure, which The Nation reported as Rs1,719 in a determination dated June 23. SSGC’s request sits well above its determined price. The Nation also reported that the petitions are reviews of revised revenue requirements for fiscal 2026-27, and that SNGPL showed a surplus of Rs43.68 billion and SSGC one of Rs1.26 billion, even as both sought higher prices.
The prescribed price is the average rate OGRA sets so a utility can meet its estimated revenue requirement. It is separate from the category-wise tariffs charged to households, industry and other consumers, which require government advice and notification. OGRA will hold hearings before ruling. Any change in what consumers pay depends on a later government decision.
The petitions arrive as Pakistan struggles to line up winter fuel. Domestic gas output is falling as mature fields deplete, which leaves the country more reliant on imported LNG. That exposes the energy sector to price swings and supply disruptions.
Pakistan normally receives an average of nine LNG cargoes a month from Qatar under two government-to-government agreements signed in 2016 and 2021. Petroleum Minister Ali Pervaiz Malik confirmed the latest extension of Qatar’s force majeure to The News. Pakistan has invited bids for two spot cargoes for December and January, and an attack on the Qatari-gas tanker Al Mayeda near the Strait of Hormuz has added to concern about winter supplies. Spot LNG has risen to about $33 per million Btu, more than double the roughly $14 Pakistan pays under its Qatari long-term arrangements.
The state-owned Pakistan LNG Ltd. invited bids on Nov. 4 for two cargoes, and the deadline was pushed to Nov. 10 at a supplier’s request. Malik is leading a delegation to Qatar to seek more cargoes under the long-term contracts. The government’s winter plan targets 18 cargoes for November through February, favoring the cheaper Qatari contracts. BOL News reported that the PLL board rejected bids from TotalEnergies and QatarEnergy for the two spot cargoes under procurement rules.
Estimates of winter needs vary. The Petroleum Division has put the requirement at 24 cargoes for the SNGPL network, according to documents seen by Arab News. The plan calls for 12 cargoes from Qatar and 10 from the spot market, at a cost above $1 billion. The News reported the government is working to arrange 10 cargoes for the two peak months against an estimated need of 20. The Petroleum Division and the National Crisis Management Cell have differed on how many spot cargoes to buy, with the latter preferring to lean on existing supply agreements to conserve foreign exchange. Pakistan imported 36 cargoes last winter, 35 of them from Qatar.
In September, household gas was limited to set morning, afternoon and evening cooking hours because the network couldn’t meet round-the-clock demand, The News reported on Sept. 27. The power sector also relies on imported gas, including regasified LNG. Under a winter gas management plan for November 2026 to February 2027, households would get priority. Supplies to industry, captive power plants, fertilizer makers and compressed natural gas stations could be cut if shortages are severe or LNG deliveries fall short.
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