Revising tariff since January, 2013: UfG fixation crops up as hurdle between Ministry & Ogra

The fixation of Unaccounted for Gas (UfG) in case of gas utilities has cropped up as a hurdle between the Ministry of Petroleum and Oil and Gas Regulatory Authority (Ogra) in revising the gas tariff since January 1, 2013, it is learnt. On the direction of Ogra, in January 2014 the Sui-Northern Gas Pipelines Limited (SNGPL) and Sui-Southern Gas Company Limited (SSGCL) started implementing a plan to reduce UfG level from 11.5 percent to seven percent and so far both the companies had brought down the level to around 10 percent, officials said.
The regulator has not approved the revenue requirements of SNGPL and SSGC since January 2013, as a result both the gas utilities are suffering estimated loss of Rs 50 billion per annum and if the government is not increasing the gas rates from January 2014 the financial losses of both the companies will further escalate.
The official said that from January 1, 2014 the government would increase gas tariff, but yet it had not been decided how much burden would be put on different sectors, adding there was a need to increase gas rates for Captive Power Plants (CPPs). The official said UfG was a real challenge for both the gas utilities as multilaterals and bi-laterals are urging the government to control and reduce UfG which at present stood at 11.5 percent or 480MMCFD. A senior official of the Petroleum Ministry talking to Business Recorder here on Saturday said during past one year local crude oil production increased by 30,000 barrels per day from 70,000 barrels a day to 100,000 barrels a day, 490 Million Cubic Feet per Day (MMCFD) of gas was added into the system, while 450MMCFD gas has been depleted from the old gas fields.
The official said "reduction of UfG is directly linked to improvement in law and order conditions as both the gas companies have transmission and distribution system across the country. We are unable to collect bills even from Karak which is a settled area from where natural gas worth Rs 5 billion is stolen per annum," he added.
The government has also temporarily put a ban on the provision of new natural gas connections owing to serious gas shortage, while 1.5 million applications are pending with SNGPL and SSGCL for new gas connections. The government is collecting Rs 150 per Million British thermal Unit (MMBTU) as Gas Infrastructure Development Surcharge (GIDC) from Industrial sector, Rs 300 per MMBTU from fertiliser plants, Rs 200 per MMBTU from CPPs and Rs 300 per MMBTU from CNG stations. The government is also collecting Rs 100 per MMBTU on account of GIDC from power companies, like Wapda, KESC and other IPPs, while the domestic and commercial consumers are exempted from GIDC. Out of 4.3 Billion Cubic Feet per Day (BCFD) national gas production, 3BCFD is being distributed through SNGPL and SSGCL network, while 1.3BCFD gas is dedicated to power, fertiliser, cement and other sectors.