Govt opens path for new RLNG connections

ISLAMABAD: The government on Tuesday asked the gas utilities and Oil and Gas Regulatory Authority (Ogra) to start processing new gas connections to consumers on RLNG-based monthly tariff at the earliest.

The Ministry of Energy (Petr­o­leum Division), in a notification to Ogra and two gas utilities — SNGPL and SSGCL — conveyed that the federal cabinet in its meeting on Sept 10 relaxed the moratorium imposed on the provision of new connections with the direction that “RLNG shall not be provided to new consumers at any subsidised rate”.

Under the decision, Sui companies have been allowed “to process all applications for provision of connections on RLNG based on Ogra-determined and notified monthly RLNG tariff for distribution network”, the Petroleum Division said, adding that the cabinet also app­roved a framework for processing of RLNG-based connections.

Under the approved framework, the annual target for RLNG-based domestic connections will be decided by Ogra based on projected availability of RLNG in the network and the capacity of Sui companies to process the applications.

“Consum­ers who have already paid the connections fee, demand note or urgent fee for indigenous gas connections will have priority provided they pay the differential of security and sign the exclusive RLNG Supply Cont­ract,” it said, adding that the merit list for processing all such applications will be assigned from the date of payment of the differential of security or the demand note fee.

Lifts moratorium, with tariffs and fees set at Rs40,000-50,000 per connection

The framework also allowed the Sui companies to demand an undertaking from the applicant for seeking prior consent for processing an RLNG connection. In contrast, the security deposit and connection fees would be determined by Ogra from time to time, in line with existing practices.

Up to 50pc of the yearly quota of RLNG-based domestic connections would be considered for processing on an urgent fee basis. These connections will be provided within three months of the payment of the urgent fee, considering the availability of the network.

The cabinet also directed that “merit lists of older applications on indigenous gas will be rendered null and void and only a new merit list for demand notices will be issued in the RLNG category, considering the new application date and date of payment of the demand notice”.

Additionally, the Sui companies will cease immediately acknowledging new applications for indigenous gas connections and will only admit applications submitted by consumers for RLNG supply.

On top of this, the disconnected domestic consumers with an ageing of more than one year would be converted into RLNG connections at the time of reconnection, subject to signing of a revised gas supply contract, the framework read, adding that Sui companies will maintain a separate merit list for RLNG-based new bulk and special domestic connections.

Additionally, the policy of providing RLNG-based domestic connections to all areas will be implemented prospectively. The existing operational indigenous gas connections shall continue to be billed at the system gas tariff as approved by the Federal Government from time to time.

Under the RLNG rate notified by Ogra for the current month, the new consumers would get gas supply at Rs4,000 per unit (including sales tax) that would keep fluctuating on a monthly basis compared to the current average sale domestic gas rate of about Rs2000 per mmBtu. While the Ogra would set the connection fee, it has been proposed to be almost four times the existing connection fee.

The first-year target of 120,000 connections has been assumed.

Priority would be given to applicants who had previously been issued demand notices or had paid the urgent fee but could not get connections because of a ban that followed. The number of new connections is expected to increase for next year.

Around 250,000 applicants fall in this category, who would have to file affidavits not to approach courts for their past claims and enhance their connection fee. Before the ban, consumers were allowed to pay an upfront fee of Rs25,000 to secure a connection on a priority basis, unlike the routine Rs5000-7500 fee. On the other hand, a new connection on LNG earlier entailed a Rs15,000 fee.

At present, more than 3.5 million applications for new connections are pending with the gas companies. While new connections provide an additional avenue for the gas companies to claim a guaranteed return on fixed assets (pipelines and related infrastructure), this also leads to higher gas losses and lower revenue recoveries on top of greater gas shortages in winter.

No wonder, then, that the Lahore-based Sui Northern is rationing gas supplies even before the peak winter demand, providing gas to domestic consumers for only 6-9 hours per day — the equivalent of breakfast, lunch, and dinner cooking times. The recent increase in fixed charges starting July 1 by 50pc provides an additional incentive to secure higher funds without additional gas supply.

The moratorium on new gas connections was imposed in 2009, partially removed after six years, and then reinstated in 2022 due to rising gas shortages. The new connection fee would now be set at Rs40,000-50,000 and the consumers would be billed at the notified regasified liquefied natural gas (RLNG) price — currently at about Rs3300 per mmBtu. The final price, including general sales tax, would cross Rs4000 per mmBtu. The average gas price for high-end domestic consumers with a monthly consumption of 300 cubic meters currently stands at Rs3,300 per mmBtu. It increases to Rs4,200 per mmBtu for consumption exceeding 400 cubic meters.

Published in Brackly News, September 17th, 2025