Tag: SSGC

  • OGRA approves massive gas tariff hike for SNGPL, SSGC consumers

    OGRA approves massive gas tariff hike for SNGPL, SSGC consumers

    In a move to address the fiscal challenges faced by Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC), the Oil and Gas Regulatory Authority (OGRA) has granted approval for a noteworthy increase in gas tariffs.

    Effective January 1, 2024, consumers of SNGPL will experience a 35.13 per cent surge, while SSGC customers will witness an 8.57 per cent rise.

    This marks the second adjustment in gas prices within the current fiscal year, following a substantial 193 per cent increase announced by OGRA, effective November 1, 2023. The decision to implement these changes is aimed at bridging the Rs98 billion shortfall collectively faced by both gas companies.

    The interim government’s initial projections aimed to collect Rs980 billion, intending to cover the estimated revenue requirements of Rs700 billion for both SNGPL and SSGC.

    The recommended average increase in the prescribed gas price is set at 23 per cent, reaching Rs1,590 per mmbtu, compared to the previous average of Rs1,291 per mmbtu determined on June 2, 2023.

    Specifically, OGRA has outlined a 50 per cent increase (Rs415.11 per mmbtu) for SNGPL, elevating the gas price to Rs1,238.68 per mmbtu, effective July 1, 2023.

    Simultaneously, the gas price for SSGC has been raised by 45 per cent (Rs417.23 per mmbtu) to reach Rs1,350.68 per mmbtu.

    The decision to increase gas prices aligns with the interim government’s commitment to the International Monetary Fund (IMF), with an agreement to announce a raise in gas sale prices by February 18, 2024.

    However, the OGRA Ordinance stipulates that if the government remains unresponsive to OGRA’s notification within 40 days, the determined tariff by the regulator will be automatically enforced.

    The recent approval underscores the ongoing efforts to address financial challenges and ensure the sustainability of the gas sector in Pakistan.

  • Sindh industries to face two-day gas supply suspension due to shortage

    Sindh industries to face two-day gas supply suspension due to shortage

    Gas supply to industries and power plants in Sindh will be stopped for 48 hours starting Saturday, as informed by the Sui Southern Gas Company (SSGC).

    The reason for this interruption is the low gas pressure in the system. There’s been a drop in pressure in the gas lines, leading to reduced supply.

    According to The News, the SSGC stated that due to insufficient gas supply, the available gas has decreased, causing low pressure in the system.

    As per the Gas Supply Agreement (GSA) guidelines for industrial customers approved by the Oil and Gas Regulatory Authority (OGRA) and authorised by the Economic Coordination Committee (ECC) of the cabinet, all industries, including power generation units, will remain closed during this time:

    Starting from 8 AM on Saturday, August 26, 2023, to 8 AM on Monday, August 28, 2023.

    The gas will be supplied according to the established priority order. The company issued a stern warning that strict action would be taken if anyone was found violating these rules during the gas supply suspension.

    The statement also mentioned that if any violations are noted during this gas holiday period, the company will take significant measures, which might even involve the suspension of gas supplies for a minimum of 7 days.

    The company’s strict stance against any breaches during this gas supply suspension underscores the importance of adherence to these measures, with the possibility of severe consequences, including a minimum seven-day disconnection of gas supplies.

  • SSGC, SNGPL customers face load shedding and low gas pressure

    SSGC, SNGPL customers face load shedding and low gas pressure

    Many households in Pakistan served by the Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines (SNGPL) are experiencing low gas pressure or no gas supply in the month of May. SSGC customers are facing seven to eight hours of load shedding, from 10 pm to 5-6 am, while SNGPL residential consumers are encountering a similar situation.

    The SSGC is facing a gas shortfall of 265 mmcfd as its demand is 1,165 mmcfd, but its supply is only 900 mmcfd, including 90 mmcfd of RLNG. The Sui Northern system has also lost 85 mmcfd gas for 12 days due to annual maintenance.

    A spokesperson from SSGC stated that the gas load shedding is being done for seven to eight hours to maintain the gas line pack so that the gas supply can be provided for 16-17 hours. Balochistan is receiving only 109 mmcfd of gas. The Sui Northern system’s situation is also vulnerable due to the suspension of supply from the Nashpa plant for 12 days.

    An official from Sui Northern stated that the gas companies are only providing gas for cooking times as per their agreement with residential consumers and not for 24 hours. However, the gas companies used to supply gas for 24 hours, which was not agreed upon by the domestic consumers.

    According to The News, the Punjab power sector is receiving 605 mmcfd RLNG, while the fertiliser sector is receiving 88 mmcfd. The power sector’s RLNG consumption has reduced to 605 mmcfd due to low temperatures. The government is receiving 900 mmcfd gas, but it has a purchasing capacity of 1,200 mmcfd. Pakistan is receiving RLNG of nine cargoes on long-term agreements, eight from Qatar and one from ENI.

    Despite the decline in RLNG prices to $12-13 per barrel in the international market, Pakistan LNG Limited (PLL) is reportedly unable to purchase spot cargoes due to a dollar liquidity crisis.

  • OGRA approves 74% hike in sui gas prices amid economic crisis

    OGRA approves 74% hike in sui gas prices amid economic crisis

    The Oil and Gas Regulatory Authority (Ogra) has approved an increase in the price of natural gas of up to 74 per cent at a time when the country’s people are struggling to make ends meet owing to rising inflation.

    According to specifics, the Sui Southern Gas Company (SSGC) and the Sui Northern Gas Pipelines Ltd. (SNGPL) would each be permitted to raise gas rates by up to 74.42 per cent and 67.75 per cent, respectively.

    Ogra’s decision will be implemented after the approval of the federal government. If the federal government does not approve it within 40 days, the decision will be implemented automatically.

    The oil and gas regulator has okayed increases of Rs406.28 and Rs469.28 per million British thermal units (mmBtu) for SNGPL and SSGC, respectively.

    OGRA further said that the average gas price for SNGPL would reach Rs952.17 per unit from the current price of Rs545.89 per mmBtu, while that of SSGCL would reach Rs1,161 per unit from the current Rs692.63 per mmBtu.

    LPG price hike

    Earlier, the prices of liquefied petroleum gas (LPG) were increased by Rs5 per kg without a notification from OGRA.

    The LPG price has now jumped to Rs260 per kg from Rs255 after an increase of Rs5. Meanwhile, the prices of domestic and commercial cylinders increased by Rs60 and Rs230, respectively.

    The gas is available for Rs270 per kilogramme in Murree, while its price exceeds Rs300 per kilogramme in Gilgit-Baltistan and Skardu.

  • Gas supply to industrial sites suspended for two days

    Gas supply to industrial sites suspended for two days

    The gas crisis has grown worse in the economic hub of Pakistan as the duration of gas load-shedding in Karachi industries was extended for up to two days.

    The industrial sites in Karachi will be facing two-day gas load-shedding instead of one.

    According to the information obtained, all industrial facilities and captive power plants in Karachi will not be supplied gas for two days.

    From December 17 to December 19, seven industrial zones and captive power plants were instructed to refrain from using Sui Southern Gas Company’s (SSGC) gas supplies on Saturday and Sunday.

    In addition to conducting unannounced raids on all industrial sites, the SSGC surveillance teams will also take legal action against those who violate the rules.

    Imtiaz Shaikh, the energy minister for Sindh, criticised the gas load-shedding on December 13 and claimed that although the province is generating more natural gas than it needs, it is still being denied its legitimate right.

    Imtiaz Shaikh, the energy minister, demanded that Sindh be given preference over other parts of the country in the provision of natural gas.

    “We will take the matter to court if required,” Sindh’s energy minister said. “We are also considering raising the issue in the Council on Common Interest (CCI),” he said.

    He said that the chief minister had discussed Sindh’s case regarding the gas issue during discussions between the state and federal governments. He expressed hope that the prime minister will pay attention to the situation.

    The provincial minister stated that when additional petrol is provided to the province, Karachi’s industry will resume operation.

    The most natural gas-producing province in Pakistan, Sindh, is now experiencing a severe natural gas shortage for home, industrial, and commercial customers.

  • OGRA lowers RLNG cost by $4.6 per MMBTU

    OGRA lowers RLNG cost by $4.6 per MMBTU

    Re-gasified liquefied natural gas (RLNG) will cost consumers of public gas utilities 20.57 per cent less in July 2022 than it did in June, according to a notification from the Oil and Gas Regulatory Authority (Ogra).

    The government has set the RLNG price for Sui Northern Gas Pipelines Limited’s (SNGPL) customers at $17.4603 per metric million British thermal units (MMBTU), according to a notification released on Friday.

    Compared to the rate of $20.7691 per MMBTU for June 2022, the new price is $3.3088 less. The general sales tax (GST) is not included in the weighted average sale price.

    The RLNG price will be $17.9575 per MMBTU for Sui Southern Gas Company (SSGC) customers as opposed to the SNGPL consumer price, which represents a $4.6501 per MMBTU decrease for July over $22.6076 per MMBTU.

  • 40-50 per cent hike expected in gas tariff

    40-50 per cent hike expected in gas tariff

    The government plans to hike the system gas tariff by up to 50 per cent as part of its efforts to gain access to the International Monetary Fund (IMF) bailout.

    The Ministry of Energy anticipates the Oil and Gas Regulatory Authority (OGRA) determining the revenue requirement for the coming fiscal year in June. As per The News, which cited sources, the tariff increase will take effect on July 1, 2022.

    Sui Southern Gas Company Limited (SSGC) and Sui Northern Gas Pipelines Limited (SNGPL), according to an Energy Ministry official, have suffered massive combined losses of Rs550 billion in recent years.

    Both are losing money since the system gas rate has not been raised in a long time. SNGPL is expected to lose Rs350 billion, while SSGC is expected to lose roughly Rs200 billion.

    OGRA will now calculate the system gas tariff under the modified OGRA statute. The IMF has encouraged the government to ensure that gas firms do not lose money as a result of the gas tariff’s stagnation, as well as to follow the modified OGRA law in its entirety.

    It’s worth noting that the government raised the price of petroleum goods by Rs30 per liter last week after the IMF stated that the bailout package would not be resumed unless the country ended petroleum product subsidies.

  • Federal and provincial companies owe K-Electric Rs170 billion

    Federal and provincial companies owe K-Electric Rs170 billion

    Federal and provincial corporations’ failure to pay K-Electric (KE) has resulted in outstanding dues of Rs170 billion.

    The huge receivables have made the country’s sole vertically integrated power provider financially unviable, and affected its future investment plans, said KE’s Chief Financial Officer (CFO), Muhammad Aamir Ghaziani.

    The company has declared an approximate Rs2.96 billion loss in FY-2020, primarily due to soaring receivables and higher debt servicing cost.

    “Financial viability is critical for continued investment. If KE is rendered financially unviable, sustainable investments may be constrained,” he said.

    Responding to a query, he answered that KE’s total receivables from government entities, including Karachi Water and Sewerage Board (KW&SB), National Transmission & Despatch Company (NTDC), and Sui Southern Gas Company (SSGC), are close to Rs170 billion.

    KE owes a principal amount of Rs13.7 billion to SSGC while the remaining is markup which is still awaiting final adjudication by the court. He said KE has honoured its payment obligations to Sui Southern Gas Company (SSGC), Pakistan State Oil (PSO) and Independent Power Producers (IPPs), although it has declared a loss of Rs2.96 billion for FY-2020.

    “If the long-standing receivables issue continues to remain unresolved, KE’s ability to serve Karachi’s growing power needs would be constrained with serious implications for citizens and industries,” he added.

    The financial statements showed that the company had been driven back into financial losses after eight years of profitable operations on account of a 166% increase in financing cost and an exponential surge in borrowing to bridge working capital requirements in the wake of unpaid dues.