Pakistan gas utilities seek higher prescribed prices to cover rising costs

Pakistan’s two primary gas utilities, Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC), have submitted separate petitions to the Oil and Gas Regulatory Authority (OGRA) requesting increases in their average prescribed gas prices for the current fiscal year. The utilities are seeking these adjustments to be effective retrospectively from July 1.

In its petition, SNGPL proposed raising its average prescribed price from the current Rs1,702 to Rs1,712.40, an increase of Rs10 per million British thermal units (MMBtu). SNGPL included Rs60.147 billion in liquefied natural gas (LNG) service costs in this proposal, estimating the cost of those services at Rs471.16 per MMBtu. The company stated that limited local gas availability during winter would necessitate extra arrangements, estimating that 16 LNG cargoes would be required during the season to maintain supplies.

SSGC requested a larger increase, seeking to raise its average prescribed price to Rs2,071.75, which represents an increase of Rs366.75 per MMBtu. Both companies argued that rising international crude oil prices are driving up the cost of gas.

The petitions arrive as Pakistan faces a persistent energy supply challenge caused by falling domestic production from depleting mature fields and a growing reliance on imported LNG. This dependence has left the energy sector vulnerable to international price volatility and supply disruptions. Regional crises have created uncertainty regarding shipments from Qatar, further complicating efforts to secure fuel for the winter.

The current supply situation has already forced authorities to implement gas load management for domestic consumers. In September, household supplies were restricted to specific morning, afternoon, and evening cooking hours because the system could not meet round-the-clock demand. Additionally, the power sector relies on imported gas, including regasified LNG (RLNG), for electricity generation, according to a report by The News on September 27, 2026.

The government is currently preparing a winter gas management plan for November 2026 to February 2027. Under this 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 severe shortages or inadequate LNG deliveries occur. The Petroleum Division estimated that 24 LNG cargoes would be needed to meet winter demand on the SNGPL network.

Financial instability also weighs on the sector. According to figures presented by the Petroleum Division in the National Assembly, gas-sector circular debt rose by Rs344 billion to Rs3.631 trillion by June 30, 2026. A report by The News on October 20 noted that these unpaid liabilities have compounded the difficulties of maintaining a sustainable supply system.

These latest petitions follow a period of volatility. In August, OGRA raised RLNG prices by up to 34.6% for July after only five LNG cargoes arrived that month, according to a Geo.tv report. The prescribed price is the average rate OGRA determines to meet a utility's estimated revenue requirement; it is different from the category-wise prices charged to consumers, which require government notification. In July, the government kept existing consumer tariffs despite OGRA setting lower prescribed prices for the utilities (Rs1,718.96 for SNGPL and Rs1,691.24 for SSGC).

OGRA will hold hearings on the new petitions before making a determination. Any changes to consumer prices will depend on a subsequent government decision and notification.