Sui Northern’s stance on gas pricing came out

Karachi: Sui Northern’s position regarding the determination of gas prices has come out, in which three reasons have been given for the increase in gas prices.

According to the details, the position of Sui Northern is being given below regarding the information circulating in the media regarding the excess costs of manpower in determining gas prices and the third increase in gas prices during this year.

Swee Northern said that labor costs make it clear that only 4 percent of the total cost of gas is operating costs, including labor, and that 94 percent of the cost is gas costs, while the rest is on capex. Contains returns.

The company said that the increase in gas price is due to three reasons, firstly, local gas reserves are continuously decreasing, due to which it is necessary to supply RLNG to the domestic sector, especially in winter.

According to Sui Northern, the average price of RLNG is around Rs 3,500 per mmbtu while the average selling price of the domestic sector is around Rs 1,100, a difference of Rs 231 billion on this basis, due to which the current gas price The price increase is necessary to recover the cost of RLNG and maintain the LNG supply chain.

He further said that it is also important to clarify here that the cost of local gas has also increased up to 69 billion rupees.

On the other hand, the Pakistani rupee has depreciated by 55% over the last two years, while all gas purchase contracts are denominated in US dollars and are linked to the price of crude oil/furnace oil.

It may be mentioned here that despite the recent increase in gas prices, the average price of gas for protected category domestic consumers is Rs 513 per mmbtu as against its purchase price of Rs 1,674 per mmbtu. Somewhere less.

It should be noted that 44 lakh i.e. 60% gas consumers of Sui Northern come under protected category. These are the customers whose gas bill has been less than 2000 rupees including taxes during the month of February.

It is also worth mentioning that despite the increase in gas price, a subsidy of Rs 128 billion is expected to be provided to the consumers of Sui Northern in the financial year 2023-24.

It should be noted that gas business in Pakistan is highly regulated which is governed by OGRA Ordinance 2002. OGRA has been conducting public hearings since 2002 to determine the revenue requirements of gas companies. OGRA conducts public hearings twice a year to determine gas prices.

The mentioned OGRA public hearing is for the fiscal year 2024-25, which will be effective from July 1, 2024 and will not have any immediate impact on gas prices.

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