OGRA decides to end years old controversy, allows maximum Sui Cos' UFG claims

ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) Wednesday said it was ending years’ old controversy and unnecessary prolonged litigation with the Sui gas companies, allowing them maximums of their claims against line losses viz-a-viz the UFG benchmark of 2.6 percent.

The Sui Southern Gas Company (SSGC) had claimed a maximum of 2.44% UFG losses and OGRA had already allowed 1.57% in the FY 2012-13 to FY 2016-17.

A press release issued by OGRA here stated that 0.87% was further allowed to the SSGC and now (variable allowance) capped to 2.44%.

The financial impact of this shall not be passed on to the consumers.

About the Sui Northern Gas Pipelines Ltd (SNGPL), OGRA said it had claimed 3.29 % for the same years against which it had been allowed 2.49% and now only 0.11% was being given to it.

However, OGRA limited their claims to a maximum of 2.6% and the financial impact of which would be staggered in the next five financial years, which amounted to an increase of less than 50 paisa’s per MMBTU.

"This decision shall end the constant litigation on this account and lay to rest the continuous friction between the Sui companies and the regulator.

The regulator will also be cognizant of the fact that it is also bound by certain laws and cannot take arbitrary decisions in the name of the best interest of the consumers, as had this decision not been taken, the equity of SSGC would have been wiped out and it would become simply a burden on the national exchequer.

It is up to the Sui companies to improve their performances and become sustainable in future as they cannot expect to be bailed out by the Federal Government always," OGRA said.

The Sui gas companies needed to control their UFG (unaccounted for gas) losses, which were simply not possible without internal collusion, it added.