Gas Prices Overview: Sui Companies Set for Windfall

Staff Report

ISLAMABAD: In a most anticipated development, the Oil and Gas Regulatory Development Authority (OGRA) has notified increase in gas prices for domestic Bulk, general industry (process) and power generation segment in range of 7-17%.

 Alongside this, the fixed charges for domestic protected and non-protected consumers are also increased by 50-100%.

 The notification of gas price adjustment was a structural benchmark under IMF program and was required to be published before or on Jul 01, 2025.

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Fixed Charges increase by 50-100%: The fixed charge for a domestic consumer are increased in range of 50-100%. For protected consumer, the charges are revised up from Rs400 monthly to Rs600 monthly. While for non-protected consumers, the charges are increased from Rs1,000 to 1,500 for consumption upto 1.5hm3 and from Rs1,500 to 3,000 for consumption over 1.5hm3.

  Both Sui companies have customer base of 10.5mn and we estimate, Sui companies will be able to collect additional Rs39.5bn out of this increase.  Company wise, SNGP will be able to collect Rs29bn additional and SSGC will collect Rs10.6bn.

 Domestic Bulk gas tariff increased by 9.5% to Rs3,175/mmbtu: The domestic bulk category is expected to generate additional Rs4bn for both Sui companies. The total consumption of domestic Bulk is around cumulative 40mccfd in the system. This is 3% of total natural gas supplied through Sui companies.

 General Industry (Processing) tariff increased by 7%: The revised rate for general industry (processing) now stands at Rs2,300/mmbtu. This is expected to generate additional cashflows of Rs10bn, of which SSGC is Rs8bn and SNGP is Rs2.2bn, based on our estimates. Processing Industry consumes 12-13% of the natural gas supplied through Sui network.