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ISLAMABAD: Gas utility companies - Sui Northern Gas Pipelines Limited (SNGPL) and the Sui Southern Gas Company Limited (SSGCL) - may file a review petition against the decision of the Oil and Gas Regulatory Authority (Ogra) for fixing UfG percentage on imported RLNG equal to UfG ceiling for natural gas, sources said.

Both the gas companies assured in documents Performance Agreement 2021-23 with Ministries, the gas companies will implement ongoing three years UFG Reduction Plan by SNGPL (reduction of four percent in three years from financial year 2019-20 to financial year 2021-22) and the SSGC will implement ongoing three years UfG Reduction Plan (reduction of 7.2 percent in three years from financial year 2019-20 to financial year 2021-22).

In decision on UfG released on Friday, the Ogra raised certain observations.

Both companies do not have separate RLNG measurement mechanism at their transmission and distribution networks.

Indigenously produced gas and RLNG are coming led and supplied through the same distribution network and through the same or single consumer meters.

Both gas companies are arbitrarily allocating domestically-produced gas and RLNG supplied to consumers.

Cash-strapped Pakistan purchases pricey LNG for Sept

The RLNG is to be ring-fenced in terms of accounts and systems sufficient to enable determination of actual distribution loss.

Both the companies are not maintaining any mechanism to effectively achieve ring fencing.

The authority observed that determination of actual UFG separately for indigenous supply and RLNG, requires independent and in-depth review, verification, analysis, due diligence and calculation of actual purchases, sales, GIC, free gas facility, amount claimed against rupture.

Gas companies have misinterpreted the decision of the Ogra and termed it as a deviation from the ECC policy guideline.

In this reference, the Ogra holds that it has not deviated from the relevant ECC policy guidelines, rather it is ensuring correct and strict implementations of the same for determination of actual distribution loss.

Subsequent to the finalisation of the audit and in strict compliance of the ECC decision and policy guidelines, the UFG values provisionally charged to RLNG consumers (including those impugned by gas companies for the period August 2020-May 2021) shall be adjusted based on actual average UfG of RLNG for last financial year as determined by the Ogra.

In case, party is aggrieved with this decision of the Authority, they may file review, the Ogra concludes.

Copyright Business Recorder, 2021


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