ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Monday concluded hearing on Rs190 per unit (about 47 per cent) increase in average gas price demanded by the Sui Northern Gas Pipelines Limited (SNGPL) amid serious question marks by stakeholders.

Informed sources said that the SNGPL pleaded that its final revenue requirement (FRR) for 2014-15 entailed a shortfall of about Rs84 billion because of an accumulated revenue impact of three years i.e. fiscal year 2012-13, 2013-14 and 2014-15 which needed to be met through increase in gas price. The company stated that its sales volume dropped by around 11pc in a year from about 1,400 to around 1,250 mmcfd.

Ghayas Abdullah Paracha, chairman, All-Pakistan CNG Association (APCNGA), stated that the SNGPL collected Rs1.2 million per station from its members (about Rs10bn in total) for supply of liquefied natural gas without entering into an agreement or any other legal requirement. The SNGPL cannot collect any amount from any consumer without prior approval of Ogra, he added.

The SNGPL confirmed that it had collected the amount from CNG station owners as advance for supplying RLNG under verbal arrangements agreed to by SNGPL and APCNGA.

Ogra Chairman Saeed Ahmad Khan directed the SNGPL to file a statement on the arrangements and the amount collected so far.

Mr Paracha pleaded that despite confirmation by the SNGPL that its gas volumes had declined by 11pc, the APCNGA or any other private entity was not allowed to import LNG though the APCNGA had finalised arrangements for imports.

He requested the Ogra to direct the SNGPL and other authorities to allow APCNGA or any other private entity to import LNG under the existing policy and third-party access rules.

He said the APCNGA welcomed the RLNG price announced by the Ogra a few days ago and demanded that the government should immediately issue a notification in this regard.

He said that the SNGPL had been charging high rate of RLNG from CNG stations as against the approved rates. The SNGPL be directed to refund the excess amount.

He said the Ogra had also charged 12pc system losses on RLNG supplies against 0.5pc losses allowed by the Ogra, which should also be refunded or adjusted in CNG price.

Chaudhry Aslam, a Lahore-based intervener, pleaded before the regulator that the SNGPL had claimed Rs6-10bn annual loss on account of gas theft in Kohat and Karak areas. A consumer based in Lahore or Peshawar cannot be punished for the mismanagement or theft in one area.

He argued that the federal government should deduct the loss against royalty on oil and gas being paid to the Khyber Pakhtunkhwa government instead of charging this penalty from common consumers, while the Ogra was already allowing some losses, including theft in consumer tariff.

He also argued that Nepra was allowing rate of return on investments to power plants for a specific period of time, but the gas companies were charging return on assets for laying pipelines in 1970s which was unjustified. He said the Ogra should allow return on assets for a fixed period.

Published in Dawn, October 20th , 2015

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