The Oil and Gas Regulatory Authority (Ogra) has turned down the request of Sui Northern Gas Pipeline (SNGPL) to raise gas tariff by Rs 2.43 per mmbtu and, instead has revised the average prescribed price downward by Rs 2.93 per mmbtu.
However, the benchmark of the ''unaccounted for gas'' (UFG) has been raised to 7 percent, against the upper and lower target of 5.50 percent and 4.50 percent respectively, fixed by the Authority (Ogra). The UFG has been reported at 8.68 percent (57,444 mmscf) and SNGPL had requested to fix UFG target at 7.5 percent, for three years, in its review petition submitted to Ogra.
Ogra official said that UFG benchmark has been raised to 7 percent for financial year 2009-10 and, after adjustment, prescribed price has been revised downwards by Rs 2.93 per mmbtu.
The petitioner had filed a petition on September 22, 2010 under Section 8(2) of the Oil & Gas Regulatory Authority Ordinance, 2002 (the Ordinance) and Rule 4(3) of the Natural Gas Tariff Rules, 2002 (NGT Rules), for determination of its Final Revenue Requirement (FRR) for FY 2009-10 on the basis of accounts, as initialled by its statutory auditors.
The petitioner had worked out its FRR for the financial year 2009-10 at Rs 177,224 million for actual sale volume of 547,863 BBTU. Based on the provisional prescribed prices and actual sale mix, the petitioner had computed a shortfall of Rs 1,331 million, thereby seeking increase in the average prescribed price by Rs 2.43 per mmbtu.
In view of the arguments submitted by the petitioner and participants'' comments, Ogra has decided to: (i) treat Late Payment Surcharge (LPS) as non-operating income; (ii) determine the other operating income at Rs 258 million; (iii) addition in fixed assets at Rs 15,610; (iv) allow closing balance of fixed assets at Rs 72,028 million; (v) accept the cost of gas at Rs 143,333 million; (vi) allow the UFG at 7 percent, based on which disallowance on this account comes to Rs 4,670 million; (vii) decrease the T&D cost to Rs 7,492 million as against Rs 8,232 million claimed by the petitioner; (viii) accept the GIC at Rs 2,287 million; and (ix) reduce WPPF to Rs 330 million as against Rs 335 million claimed by the petitioner.
In another petition, SNGPL had also requested the Ogra that prescribed prices of financial year 2010-11 be allowed to raise by Rs 37.25 per mmbtu for each category of consumers to meet Rs 23.598 billion revenue shortfall. SNGPL had sought increase due to hike in cost of gas Rs 21.69 per mmbtu, central excise duty (CED) Rs 5.52 per mmbtu and transmission and distribution (T&D) Rs 10.05 per mmbtu. Ogra conducted re-hearing of review petition submitted by SNGPL on October 7, 2010 and decision is yet to be announced.