Oil and Gas Regulatory Authority (Ogra) chairman Munir Ahmed said that rights of all stakeholders would be protected in accordance with the law and in the best interest of public. He said this at a public hearing organised by the Ogra in Islamabad on a petition by the Sui Northern Gas Pipelines Company Limited (SNGPL). The petition was for review against Ogra's determinations of May 29, 2004 of SNGPL's revenue requirement for 2004-05.
The hearing was attended by representatives of Northern Power Company limited, Pakistan CNG Dealers Association and the finance division while Consumer Rights Forum sent written comments.
According to press release issued here on Tuesday, SNGPL managing-director A. Rashid Lone and chief financial officer Shah Muhammad Chaudhry made a detailed presentation. They also responded to questions raised by the Ogra professionals and participants.
The petition was heard by, besides Ogra chairman, Jawaid Inam, member (gas), Rashid Farooq, member (oil), M.H. Asif, member (finance).
The SNGPL in its earlier review motion submitted in June 2004 had requested for increase in the prescribed prices by Rs3.62 per mmbtu w.e.f., July 1, 2004.
In a subsequent amendment to the motion, the SNGPL requested for additional increase of Rs14.16 per mmbtu w.e.f., January 1, 2005 owing to mainly increase in the cost of gas based on sharp increase in the international oil prices to which the price of gas payable to producers is linked.
The authority passed an interim order on December 23, 2004 allowing increase in the average prescribed price on provisional basis of Rs12.01 per mmbtu w.e.f., January 1, 2005 to take care of the impact of increase in oil prices, which is inescapable under the gas pricing agreements between the federal government and gas producers.
The application for review of estimated revenue requirement for 2004-05 was admitted on June 15, 2004 and the authority decided to hold a public hearing after giving notice in the press to all interested and affected persons.
The participants strongly opposed the petition, saying that any increase in gas prices shall have adverse economic and financial impact on gas consumers.
All Pakistan CNG Associations stated that CNG consumers suffered technical problems.
However, he went on to say that the SNGPL had assured to redress the problem and, therefore, he would not press the issue.
Muhammad Iqbal, representative of finance division submitted the governments written comments, stating that proposed increase in the prescribed price of gas tariff would lead to increase in the consumer price and supported the Ogra's earlier decisions except the unavoidable increase on account of increase in oil prices.
Defending the petition, the SNGPL representative said that cost of gas is the dominating factor in SNGPL's motions for increase in revenue requirement, which is inescapable.
The crude oil prices remained extraordinarily high during July-December 2004 period, therefore, it would have impact on wellhead gas prices applicable to January-June 2005 period.
In case the increase is not allowed by the authority, it would create a serious problem for the SNGPL. Winding up the hearing, the Ogra chairman said that it was the duty of the authority to balance the divergent interests of utility companies and consumers.
He said that the authority will scrutinise all costs with the help of a team of professional engineers, financial and legal experts.
He said that Ogra has provided opportunity to all stakeholders in the hearing and their tangible suggestions will help the authority in its analysis.-PR
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