In this Dec 11, 2012 photo, drivers queue at a gas station in Islamabad. — Photo by AP

ISLAMABAD: The Supreme Court reserved on Thursday its ruling on the contentious CNG pricing issue, but made it clear that it would not interfere in the working of the gas regulator which determines tariff.

A two-judge bench comprising Justice Jawwad S. Khawaja and Justice Khilji Arif Hussain hearing the case indicated that it might issue the verdict on Friday.

The CNG Association requested the court to order the fixing of CNG price at Rs73 per kg.

The court asked the Oil and Gas Regulatory Authority (Ogra) to continue to deliberate on the issue of gas price for consumers.

Following a court order on Oct 25, the government had reduced the prices of CNG by Rs31 per kg. Since then consumers have been facing hardship because a large number of owners have closed their CNG stations in protest against the decision.

Petroleum Secretary Dr Waqar Masood informed the bench that the Economic Coordination Committee of the cabinet had formed a four-member committee, headed by Law Minister Farooq Naek, to formulate guidelines for Ogra because the government was also worried over the issue.

Advocate Waseem Sajjad, representing the Sindh CNG Association, sought a court order for Ogra to determine an appropriate price for CNG.

But Justice Khawaja said the court would not interfere in the regulator’s affairs and asked Ogra to continue with its work on the mechanism for fixing CNG prices, keeping in view the interests of all stakeholders and acknowledging that the prices had become a major issue in the country.

Advocate Abid Hassan Minto, the counsel for Sui Northern Gas Pipelines Limited (SNGP) and Sui Southern Gas Company (SSGC), suggested that while fixing CNG prices, Ogra should also take into account points of view of the gas companies.

Ogra used to fix gas prices without consulting experts on the issue, he said, adding that the regulator had always rejected experts’ report on CNG prices.

Advocate Salman Akram Raja, the counsel for Ogra, regretted that the petroleum ministry had always been conniving with the two gas utilities. To substantiate his claim, he said that in 2010 the petroleum ministry had supported the gas companies and
ignored the stance of Ogra.

He said former Ogra chairman Tauqir Sadiq had increased the ratio of unaccounted for gas (UFG) losses from five to seven per cent which resulted in an increase of SNGPL shares from Rs16 to Rs36. “These shares were bought by those who were already
aware of this in advance,” he alleged.

In 2003-04, a benchmark was set that the gas utilities would bring down UFG to a level of four to five per cent by 2011-12, but the successive governments plundered the two companies for extraneous reasons by ignoring the real issue of UFG, he said.

Advocate Raja alleged that 1,100 people had been inducted into the companies with one stroke of pen. He informed the court that at least four fertiliser plants in Punjab had been shut down over the past two to four months because of shortage of gas.

Advocate Hafiz Idrees, representing CNG stations in Rawalpindi, contested the impression being created that station owners used to make a windfall profit of Rs32 per kg and explained that CNG price was Rs45 per kg in 2008, which increased to Rs55.56
in 2011.