Government puts plan to raise gas tariff on hold

Federal government has put its plan of revising gas tariff on hold till the legal battle between Oil and Gas Regulatory Authority (Ogra), Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company (SSGC) in Lahore High Court (LHC) is decided, Business Recorder has learnt.
The federal government was to notify new gas tariff effective from January 1, 2011 in line with Ogra's decision. Ogra determined to raise gas tariff by Rs 1.85 per mmbtu and Rs 3.69 per mmbtu for SNGPL and SSGC, respectively to meet revenue requirements for financial year 2010-11.
Federal government is bound to notify new gas prices after decision of Ogra within 40 days. But gas utilities, SNGPL and SSGCL, have challenged Ogra decision on gas tariff in LHC, which forced the federal government not to revise gas tariff from January 1, 2011, as the court is currently hearing the case.
All Pakistan CNG Association (APCNGA), the consumers as well as all other stakeholders including textile and industrial sectors have welcomed the decision of Ogra not to pass on the gas tariff hike to consumers. SNGPL and SSGC want hike in gas tariff and, therefore, have challenged Ogra decision in LHC.
According to Ogra decision, the petitioner (SSGC) had submitted a review petition on October 18, 2010, under Section 8(2) of the Ordinance (the petition), projecting a shortfall of Rs 10,891 million translating into an increase of Rs 59.51 per mmbtu, wef January 1, 2011 (Rs 30.07 per mmbtu on annual basis).
The petitioner (SNGPL) had projected revenue shortfall of Rs 13,239 million, translating into an increase of Rs 42.35 per mmbtu, wef January 01, 2011 (Rs 21.37 per mmbtu on annual basis). The interveners during public hearing had revealed that the gas theft law must be enacted on immediate basis to curtail ever rising theft and resultantly Unaccounted for Gas (UFG). They said SNGPL staff was involved in rampant gas theft. "The gas consumers must not be punished on account of the relaxation in UFG benchmark of the petitioner," participants of public hearing said.