SSGC, SNGPL overcharged Rs26bn from consumers

ABDUL RASHEED AZAD

ISLAMABAD: The Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipelines (SNGPL) have overcharged the gas consumers by Rs 26 billion in last two years, official documents available with Business Recorder show.

According to the documents, "the then Secretary Ministry of Petroleum had also explained to the court that stay order would not entail any sale price increase for natural gas consumers as a sequel whereof the subsequent determinations result in the under-noted situation".

The situation mentioned referred to "an extra burden to the tune of Rs 26 billion had been passed on to consumers in financial year 2010-11 and 2011-12 as a consequence, Federal Government announced price increase of 13.55 percent with effect from August 07, 2011. Recently, Ministry of Petroleum and Natural Resources (MP&NR) has increased sale price for various categories of consumers in the range of 13.98% to 207% effective January 01, 2012". The whopping increase added to the miseries of general public and created social unrest in several parts of the country. Additionally, the documents contend that "in case of SNGPL, Rs 12 billion of gas development surcharge has been eroded in 2011-12 alone".

The letter stated "It is submitted that Deputy Attorney General of Pakistan and the then Secretary Ministry of Petroleum had not supported Ogra's stance in Lahore High Court for treating Late Payment Surcharge, Meter Manufact4ring Plants, Sale of gas condensate and Royalty from Jamshoro Joint Venture Limited (JJVL) as operating income and fixing UFG targets per OGRA's prescribed benchmark of 2.5 percent in the revenue requirement for FY 2010-11".

According to sources in Petroleum Ministry, the then Secretary Petroleum Imtiaz Qazi requested the LHC to declare line losses, meter manufacturing plants, late payment surcharge as non-operating costs which would have no impact on consumer gas prices. As per international business practices the Authority considers abovementioned costs of gas utilities as operation costs.

The Oil and Gas Regulatory Authority (Ogra) in a written letter had requested the government to review its stance and vacate Lahore High Court's stay order against Authority's decision in the larger public interest.