Uncounted for gas: SNGPL and SSGC set to suffer Rs16.5bn loss

ABDUL RASHEED AZAD

ISLAMABAD: Gas utilities – Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC) will have to suffer an estimated loss of Rs 16.5 billion on account of Unaccounted for Gas (UfG) during the current fiscal year.

Saeed Ahmed Khan, Chairman Oil and Gas Regulatory Authority (Ogra), while addressing a press conference on Friday said SNGPL will suffer a loss of over Rs 14.2 billion and SSGC over Rs 2.2 billion on account of UfG.

The chairman said the authority has directed the gas companies to bring down UfG losses to 5 percent as they would not be allowed to put the burden of gas theft on consumers, adding that losses above the fixed level  would be paid by the gas utilities from their profit.

He added that Ogra had tightened noose around SNGPL by slashing the rate of UfG losses. The company is currently facing 11 percent UFG losses due to gas theft and leakages.

Since 2009-10, both SNGPL and SSGC recovered 7 percent of the losses from consumers despite the 5 percent benchmark, due to a controversial decision taken by former Ogra chairman Tauqeer Sadiq.

“Ogra has now reduced the UfG ceiling from 7 percent to 4.5 percent for SNGPL, while SSGC will continue recovering 7 percent of UfG losses from consumers,” said the Ogra Chairman. The cut in SNGPL’s UfG ceiling has irked Advisor to Prime Minister on Petroleum and Natural Resources, Dr Asim Hussain, who criticized Ogra for the decision.

On the occasion, Saeed Ahmed assured that the issue of CNG price would be resolved as per the directions of the Supreme Court before December 17. He said that on October 25, the SC had not fixed CNG prices instead the apex court directed the authority to fix the commodity prices.

“We in consultation with other stakeholders have devised a new CNG formula and sent it to the Petroleum Ministry for final approval, but we have received no response from the Ministry as yet,” Saeed said.

As per the new pricing formula in region-I comprising Khyber-Pakhtunkhawa, Balochistan and Potohar (Rawalpindi, Islamabad and Gujjar Khan) the authority has proposed commodity price to be fixed at Rs 72.20 per kg while Region-II comprising Sindh and Punjab (excluding Potohar Region) at Rs63.76 per kg.

He said the authority has sought policy guidelines from the Ministry of Petroleum for fixing CNG prices but the prices are yet to be issued, adding that Ogra would again hold meetings with all the stakeholders.

Saeed further said that during the current year, gas theft is estimated at over Rs16 billion and gas companies have been directed to cover this loss through their profits instead of shifting the burden to the consumers.