Pakistan’s two major gas distribution companies — Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) — have requested a 5% increase in gas prices as part of their revised estimated revenue requirements for FY2026.
The companies have sought a slight increase in gas tariffs for domestic consumers, citing the expected depreciation of the rupee against the U.S. dollar. They stated that RLNG diversion is projected to reach 81,303 BBtu, which is 2% higher than earlier estimates for FY2026.
RLNG diversion has recorded a 65% year-on-year increase, driven by lower demand from the power sector and the shift of numerous captive power plants to the national grid.
An increase in Transmission & Distribution (T&D) expenses has also been proposed, primarily due to the repair and rehabilitation of flood-damaged gas pipelines and infrastructure requirements for RLNG connections. Additionally, SSGC has requested a PKR 34 billion prior-year adjustment for FY2024.
According to SNGPL, gas demand from the power sector has dropped by 150–200 mmcfd, down from the earlier estimate of 550 mmcfd. Gas consumption by captive power units has also declined sharply from 190 mmcfd to 60 mmcfd. The company estimates that gas load curtailment in FY2026 will reach 269 mmcfd, mostly during the second half of the year.
Experts believe that the actual increase in consumer gas prices is likely to be minimal or negligible, as the Oil & Gas Regulatory Authority (OGRA) generally does not allow various cost components, such as finance costs, UFG losses, prior-year adjustments (PYA), and revenue shortfalls in Balochistan.
Both gas companies submitted their revenue requirement petitions to OGRA separately for FY2026. The petitions indicate that the average gas volume is expected to decline from 495,545 BBtu to 471,976 BBtu.
To manage financial pressures, the following key adjustments have been recommended:
- Increase gas cost from PKR 1,533 per MMBtu to PKR 1,547 per MMBtu.
- Revise exchange rate assumption from PKR 280/USD to PKR 284/USD.
- Lower the global crude oil price estimate from $75 per barrel to $73 per barrel.
A significant increase has also been proposed in the prescribed price:
- From PKR 1,793 per MMBtu to PKR 1,886 per MMBtu (excluding PYA).
- PKR 1,958 per MMBtu (including PYA).
The previously approved estimated revenue requirement for FY2026 was PKR 1,793 per MMBtu.
