Ogra downs SNGPL tariff, ups SSGC's
06 February, 2013
ISLAMABAD: Viewing the revenue requirements and income of gas utilities, Oil and Gas Regulatory Authority (Ogra) has approved to increase the tariff of Sui Southern Gas Company Limited (SSGCL) while it has decreased the tariff of Sui Northern Gas Pipelines.
ISLAMABAD: Viewing the revenue requirements and income of gas utilities, Oil and Gas Regulatory Authority (Ogra) has approved to increase the tariff of Sui Southern Gas Company Limited (SSGCL) while it has decreased the tariff of Sui Northern Gas Pipelines. However, gas consumers would bear heavy brunt of this hike in tariff of SSGCL but they would not find any relief due to such decrease in tariff of SNGPL only because of the federal government's formula in this regard. Available copy of Ogra's decision pertaining tariff of gas companies disclosed to TheNation that the regulator (Ogra) has jacked up tariff of SSGCL by Rs9.66/mmbtu while tariff of SNGPL has been reduced by Rs7.91/mmbtu. During last financial year 2011-12, income of SNGPL stood at Rs224 billion and 90 crore while the gas company's revenue requirement remained at Rs220 billion and 49 Crore and in this way the company additionally earned Rs4 billion and 41Crore.
However, under the federal government's formula, the additionally earned (Rs4 billion and 41 Crore) income of SNGPL would go to the pool of Gas Development Surcharge, which would be handed over later to the provincial governments. And, as the federal government has already collected Rs9 billion from the over burdened consumers of Punjab and Khyber Pakhtunkhwa (KP) so after this decision the amount would be surged to Rs13.5 billion wherein Rs9 billion and 72 Crore would be given to Sindh government.On the other hand, the revenue requirement of SSGCL was witnessed at Rs134 billion and 90 Crore while the company's income stood at Rs131 Crore and 58 Crore during the last fiscal year 2011-12. In this way, the SSGCL faced a loss of Rs3 billion, 32 Crore and 10 Lakh, which the gas utility would pay from the emptied pockets of its consumers during the next financial year.
Documents further declared that Ogra on account of stolen gas, non-metered and metered losses including non-recovery of bills from crisis-riddled KP and Balochistan provinces has rejected collection of Rs9 billion from the poor consumers already paying their bills regularly. During the first week of New Year, the issue of state-owned gas utilities' exorbitant demand for disallowances on unaccounted for gas (UFG) and non-recovery of bills and non-metered gas remained indecisive even after of a couple of hours heated debate in the federal cabinet.During the course of this meeting, the regulator's viewpoint was clear that it had approved the law and order and non-recovery of bills allowances for the Sui Southern Company which genuinely deserving for operating in Balochistan and Sindh.
The Petroleum Ministry was of the view that denial to grant the demanded allowances would threaten the financial viability of these utilities. Therefore, the PM decided to constitute a committee sensing the gravity of the issue under the law minister Farooq H Naek and sought a report.It merits mentioning here that SNGPL had demanded of the Ogra to allow it to collect Rs6.3 billion from the consumers and SSGCL demanded Rs2.1 billion while Petroleum Ministry has surprisingly sought from the regulator (Ogra) Rs6.4 bilion for SNGPL and Rs3.2 billion for SSGCL above the demands of both gas utilities which is apparently unjust and not fair.