Petition against hike in UFG benchmark: IHC issues notices to ministries, Ogra

The Islamabad High Court (IHC) on Wednesday issued notices to Ministry of Petroleum and Natural Resources, Ministry of Finance and Oil and Gas Regulatory Authority (Ogra) in a petition challenging increase in unaccounted for gas (UFG) benchmark from 4.5 to 9 percent.
A single-member bench headed by Justice Athar Minallah heard an application filed by Advocate Farrukh Dall which stated that through an illegal decision Petroleum Ministry and Ogra were trying to increase UFG benchmark from 4.5 to 9 percent on the pretext of non-consumers 'gas theft, law and order situation and bulk/retail ratio which is illegal/unlawful act on their part.
During the course of proceeding, the court issued notices to the respondents directing them to submit their replies on the matter. The court also issued notice to the Attorney General for Pakistan, directing him to inform the court about his opinion on the matter within a fortnight. Advocate Farrukh Dall made federation of Pakistan through Secretary Cabinet Division, Ministry of Petroleum and Natural Resources, Ministry of Finance and Ogra as respondents.
The petitioner pleaded that the Constitution of Pakistan was not silent over the issues, which affect economic life of citizens. "Constitution contains a whole range of articles 3, 4 and 5(2) 9, 14, 18, 23 and 24 which have a direct nexus with good economic governance and fundamental rights, maintained the petitioner.
He stated that the UFG benchmark of 4.5 percent was fixed by Ogra for Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Company Ltd (SSGCL) for fiscal year 2011-12 to 2014-15 whereas through an illegal decision Petroleum Ministry and Ogra were trying to increase UFG benchmark from 4.5 to 9 percent on the pretext of 'gas theft, law and order situation and bulk/retail ratio which is illegal /unlawful act.
"This is being done by them despite Prime Minister's deferment for change in the gas pricing mechanism that is estimated to increase consumers' tariff significantly," he added. Dall maintained that the combined impact on the consumers would be Rs 65-70 billions if the decision is implemented. In fact 4.5 percent UFG benchmark fixed by Ogra in the consumer tariff was meant to reasonably cover the cost of pilferage, leakage, loss in security situation and all other difficulties.
He contended that Petroleum Ministry and ECC was not legally empowered to issue policy guidelines on UFG in the first place as it is a direct jurisdiction of Ogra, which it has been exercising since its inception in 2002. He maintained that the Government and Regulator were obligated to launch the campaign against gas theft rather passing the theft on to the gas consumers.
He added that the Supreme Court of Pakistan through a November 25, 2011 judgement had shown serious concerns over high UFG of 11 percent on SNGPL system and 9.5 percent on SSGCL system and also referred the matter of increasing UFG benchmark from 5 percent to 7 percent for year 2009-2010 to NAB for investigation.
He contended that rectification of gas leakages was the core responsibility of the company to which any negligence is not entertainable as gas leakages are clearly as controllable factor. The petitioner added that theft of gas had contributed towards increase of UFG but the same should have been curtailed after the promulgation of Criminal Amendment Act, 2011. He prayed to the court to declare the increase in UFG as illegal and unlawful.