The government's failure to appoint Chairman and Member Oil of Oil and Gas Regulatory Authority (Ogra) has made the regulator dysfunctional disabling it from taking important decisions in the coming weeks, senior officials told Business Recorder. In the tenth review of International Monetary Fund (IMF) uploaded on its website the government agreed to increase consumers' gas tariff from July 2016 to ensure cost recovery and help reduce financial losses of gas companies, but to implement these decisions requires a quorum which Ogra does not have at present.
Given the decline in international oil prices and consequent revenue requirements, the government maintains that the current gas tariff is in line with Ogra determination for FY 2014/15 until the next round of determination in July 2016, when the government will resume the practice of regular semi-annual notifications. This allows for recovery to meet the revenue requirements of the overall system. The government also makes any necessary adjustments to notified prices to reflect imported gas prices, so that the cost of gas will be fully reflected in the tariff on a monthly basis.
According to sources, the regulatory body is without a chairman since April 2016 after the retirement of Saeed Ahmad Khan and without permanent member oil since 2014 after the retirement of Sabir Hussain the former Member Oil. Ogra has to take a number of necessary steps including approval of Final Revenue Requirements (FRPP) of Sui-Northern Gas Pipeline Limited (SNGPL) and Sui-Southern Gas Company Limited (SSGCL but in the absence of member oil and chairman the Authority does not have the quorum to take these decisions.
"Ogra has to approve FRPP of SNGPL, SSGCL, wellhead gas prices of the newly discovered gas fields, look into the matters of Natural Gas (LNG) and other such issues but the offices that are empowered to take these decisions are lying vacant," the official said.
The Chairman and Members are appointed by the federal government through a competitive process on tenure basis in accordance with the provisions of the Ogra Ordinance.
Ogra consists of four members namely Chairman, Member Oil, Member Gas and Member Finance. At present there is no chairman and member oil and to pass any important order the presence of three members is required for a quorum. Sources said that for the appointment of member oil the government completed the process in October 2015 but has failed to issue the notification for reasons not known. Sources urged the government to introduce an integration plan of all the regulatory bodies so that Pakistan's regulators can compete with international bodies.