Gas theft charges controversy put off … for now

Published: February 27, 2013

In case these losses are passed on to consumers, gas prices are estimated to increase on average by Rs13 per unit. CREATIVE COMMONS

ISLAMABAD: A government plan to charge Rs9 billion worth of stolen gas from bill-paying consumers seems to have been put on the backburner, as Law Minister Farooq H Naek has said the federal government may not issue a directive to the Oil and Gas Regulatory Authority (Ogra) in this regard.

Sources told The Express Tribune that the law minister, while presiding over a meeting of a cabinet panel on Thursday, made it clear that the Lahore High Court has already given a directive to set the unaccounted-for gas (UFG) ceiling at 4.5% for Sui Northern Gas Pipeline Limited (SNGPL). The UFG ceiling is the maximum percentage gas utilities can charge from consumers on account of gas leakage, pilferage and unbilled usage.

“A federal government directive passing the bill to consumers on account of non-bill paying consumers, minimum billing and gas consumed in poor law and order situation areas would be against the court decision; therefore the federal government may not issue a directive to Ogra,” sources quoted the minister as saying.

In case these losses are passed on to consumers, gas prices are estimated to increase on average by Rs13 per unit.

Sources further said that the law minister stated that the federal government can only issue policy guidelines in this regard. Sources said Naek feared that giving permission to gas companies to treat unbilled amounts as sales volumes would indirectly provide relief in the UFG limit, and would therefore be against the Lahore High Court’s decision.

The federal cabinet, in its meeting on Wednesday, directed the cabinet committee to hold another meeting on Thursday and take a final decision on the matter within a day.

In an earlier cabinet meeting, Ogra officials had argued that the Council of Common Interest (CCI) could issue directives to the regulator to pass on the gas theft bill to consumers under section 144, which would result in a hike in gas prices across the country. Ogra officials had said that the increase in gas prices would also affect consumers in provinces, and it was essential, therefore, to take them on board.

During the meeting, Minister Nazar Mohammad Gondal had strongly criticised Ogra for not passing on the bill to consumers. However another key federal minister, Syed Naveed Qamar, had supported Ogra’s stance that the cabinet could not decide to issue a directive to the regulator to pass on the gas theft bill. Qamar was of the view that the matter should be placed before the CCI to take provinces on board and resolve the issue.

Published in The Express Tribune, February 27th, 2013.

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