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ISLAMABAD: The provision of fixing provisional RLNG pricing by the Oil and Gas Regulatory Authority (Ogra) on a monthly basis has landed before the Public Accounts Committee (PAC).

A scrutiny of the RLNG prices determined by the Ogra showed that the authority notified provisional RLNG prices under Petroleum Products (Petroleum Levy) Ordinance, 1961, in line with other petroleum products since October 2015, and notified the final prices of RLNG till April 2017.

The Ogra has yet to notify final prices.

The RLNG supply chain is being governed under two different sets of legal regimes i.e. pricing under the Petroleum Ordinance 1961 and its subsequent cost of supply to end consumers through gas companies is determined under the Ogra Ordinance 2002.

Unresolved disputes on account of swapped volume of the RLNG between the Sui Southern Gas Company (SSGC) and the Sui Northern Gas Pipeline Ltd (SNGPL), resulting in withholding of huge amounts against each other, which requires reconciliation by a third party.

Ogra seeks govt advice on sale prices of gas

The SSGC is claiming higher UFG losses due to handling of huge volumes of RLNG and its swapping with the SNGPL, despite, its RLNG pipeline being operational since September 2018.

Ring fencing of the RLNG only allowed incremental cost of RLNG price, whereas, gas companies are demanding for allocation of T&D cost to the RLNG business on a proportionate basis.

Figures of the SSGC transportation charges included by the SNGPL were also provisional due to non-finalisation of the SSGC revenue requirements.

Non-settlement of deferral account set for the adjustment of the RLNG divergence or other outstanding matters by the Ogra.

The Ogra had issued actual RLNG prices till June 2017.

PSO to re-tender RLNG cargo: Ogra withdraws pricing notification

However, the same was held up thereafter mainly because of a court case.

The Ogra further elaborated that pricing of RLNG shall be determined as soon as the matter is decided by the court.

On June 23, 2015, the decision of the ECC to the Ogra, gas companies and the PSO issued for implementation that the RLNG price will be determined on similar lines as that of monthly petroleum products pricing.

The stakeholders had in various public hearings on Estimated Revenue Requirements (ERRs) of gas companies recommended the authority to release the final price of RLNG.

Copyright Business Recorder, 2021

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