The Oil and Gas Regulatory Authority (Ogra) has issued guidelines for the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC), asking them to bring line losses down to 6 percent, besides introducing a prudent system to improve their performance and generate more revenue.
Ogra panel member Jawaid Inam told the participants during hearing of SNGPL petition for raise in tariff from January 1, 2006 that the authority was strictly monitoring the performance of SNGPL and SSGC on the basis of given guidelines to ensure that customers do not suffer due to their inefficiency.
SNGPL officials told Ogra panel, with other members being Arshad Farooq and Asif Ali, that it has managed to cut down its line losses from 9 percent to 6.75 percent during the last one year and it was making all-out efforts to further improve its system to cut down losses to 6 percent as set by the authority.
Ogra guidelines clearly mentioned that if the SNGPL and SSGC could not keep their losses within the given percentage they will have to bear the additional expenditure from their profit.
Ogra panel took note of interventions and assured the representatives of different trade bodies and civil society organisations that the authority will look into all the aspects of the petition before giving its final verdict, Asif Ali told Barrister Khaliquz Zaman Khan, who represented All Pakistan Textile Mills Association before the authority saying that SNGPL should not be allowed double counting of estimated figures.
In his presentation said the Barrister said that gas prices were major input for textile industry and any upward revision will make this industry unviable in domestic as well as international market and eventually hit Pakistan''s exports.
He suggested that SNGPL should look for other options to generate funds for its expenditures and opined Sui Northern should have more prudent system to improve its revenues. Khaliquz Zaman also wanted cut in its expenditures.
Iqbal Ahmed of Ganj Glass while representing the industry said that Ogra should not be allowed any upward revision in gas rates at least for the current fiscal year. He was of the view that SNGPL should rely on less profit to keep other industries afloat by keeping gas rates at the current level.
President Sarhad Chamber of Commerce and Industry also pleaded before the authority that it should not grant increase in gas rates to SNGPL.
He opposed the petition, mainly on the ground that any increase in gas prices would have adverse economic and financial impact, and will reduce competitiveness of Pakistan''s industrial products.
All Pakistan Compressed Natural Gas Association was of the view that the industry was the most credible client of the gas companies by paying millions of rupees and ensured timely revenues to them, yet the CNG consumers regularly suffer technical problems especially in connection with delays and pressure drops.
The association pleaded that SNGPL''s request for 17.5 percent increase in rates should be deferred for some other time.
SNGPL management contested the Aptma and other organisations'' arguments claiming that the petition for the increase was based on facts and it will not harm various sectors as was being feared by them.
Winding up the hearing, Ogra vice chairman said that all views will be given due consideration during the decision-making as Ogra was performing its regulatory functions of balancing the divergent interests of stakeholders, investors and the government in accordance with the law. He appreciated the initiatives taken by SNGPL in reducing the UFG but pointed out that it required a major effort to meet the target fixed by Ogra.