LAHORE, April 22: The Oil and Gas Regulatory Authority (Ogra) will create a balance between the divergent interests of utility companies and the consumers, and protect the rights of all stakeholders according to law.

This was observed by Ogra Chairman Munir Ahmad while winding up a public hearing organised by the Authority to review a petition by Sui Northern Gas Pipelines Limited (SNGPL) seeking revision of latter’s revenue requirement for the fiscal 2008-09, here on Tuesday.

The petition for increase in gas price was, however, rejected by other stakeholders, including textile industry.

Representatives of various associations, members of the Press and stakeholders like industrial consumers, general public, SNGPL management and others attended the meeting.

The SNGPL managing director made a detailed presentation and gave reasons for demanding increase in its revenue requirement.

He also answered the questions raised by Ogra professionals and participants.

The SNGPL has requested an increase of Rs69.50 per MMBTU in its average prescribed price for fiscal 2008-09, and projected a Rs41,514 million shortfall in revenue requirement for the year.

The main reason for seeking increase in the prescribed price as explained by SNGPL is the projected increase in the cost of gas which the petitioner is required to pay to the producers, and linking the gas cost to the international price of crude oil/fuel oil as per agreement between the federal government and the producers.

The participants rejected the petition saying Ogra was already allowed increase inprices and any further hike would have an adverse impact on the consumers and the economy.

They further stated that gas cost constituted about 25 per cent of the total manufacturing cost, while this hike would increase their total cost by almost 10 per cent, rendering them uncompetitive against their international competitors like Bangladesh where manufacturers were getting gas at much lower rate.

It was observed that an increase of even a fraction in the tariff would result in a net loss to the textile industry, and the resultant fall in exports might deprive the country of the much needed foreign exchange.

All this would be apart from other negative fallouts like more unemployment, public resentment and chances of a law and order situation, they added.

They requested Ogra the SNGPL petition be dismissed due to its inefficacy, and non-adherence to modern techniques to make the company a viable entity. The company must develop professional attitude and reduce its cost rather than asking for an increase in the revenue requirement, they added.

They appealed to Ogra to revise the tariff downward at least for the industrial sector by slashing down the subsidy being given to fertilizer producers.

Representatives of the All-Pakistan Textile Mills Association (Aptma) attended the hearing while wearing black armbands to protest the SNGPL petition.

They informed the Authority that such an exorbitant rate of increase as being sought by the petitioner would not only ruin the entire local textile industry but would also have a devastating effect on ordinary consumer.

Also, they added, such an increase would lead to a vicious circle which would trigger the pricing of all the items in the country at the same rate.

They demanded that ‘well head gas price’ mechanism be immediately changed as it was a major factor in price determination. They suggested that natural gas being an indigenous fuel should not be linked with international prices of crude oil. Further, line losses and operating cost of the company be improved, they added.

The representatives also pointed out that the government must consider removing the cross-subsidy to solve the problems connected with price distortions.—APP