Vanishing into thin air can literally be seen in the gas sector; the country has seen a steep increase in unaccounted for gas (UFG) over the past 15 years where the gas goes missing due to leaks, theft, measurement errors, and mismanagement. This missing gas is as high as one billion cubic feet. In the recent clamour over UFG, the authorities seem to have given in to the pressures of the gas utilities by increasing its limit staggeringly, which has been their long-standing demand.

As a background, recall that OGRA appointed consultants who recently proposed a raise in the uncounted for gas (UFG) losses to 7.1 percent from the existing allowance of 4.5 percent. This proposal was in line with what the gas utilities and other stakeholders have been asking for since a longtime, calling the existing limit unrealistically set by the regulator. Not only that, the government has also been criticizing Ogra’s bar for the two public sector companies.

While the proposal by the independent consultants has been of 7.1 percent, Ogra has allowed the gas utilities to charge about 6.3 percent system losses to consumers. This includes 5 percent UFG losses to the two public sector companies against the regulator’s 4.5 percent benchmark, plus 1.3 percent additional UFG to account for the local issues like losses, thefts, law and order situation, inefficiencies, etc. against the 2.6 percent recommended by the consultants.

Even then, the agreed increase in UFG limit is not something that should be hailed; BR Research has time and again emphasized the correcting of wrongful institutionalization of practices in the public sector companies. The heightened limit accounts for inefficiencies and malpractices as well, which are signs of mis-governance and political interference. It is partly suggestive of the fact that those at the helm have little will to do away with the inefficiencies in the system while looking for a quick fix to plug the losses.