Pending reports of SSGCL, SNGPL: Shareholders still await 2013 financial results

Regulator under pressure over delay, spokesman says matter will be resolved soon.

KARACHI:

As the financial year 2013-14 comes to an end, pressure is mounting on the Oil and Gas Regulatory Authority (Ogra) to speed up pending work, some of which is spoiling the reputation of state-run companies.

The shareholders of Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL) have been waiting for months to see the financial results for the previous year, which ended in June 2013.

“Annual statement should have been published by October 2013. Now we have entered the final quarter of fiscal 2014,” said a SSGC official.

Ogra has been dillydallying on the matter, he said. “First there was lack of quorum in the decision making body and now they just seem undecided.”

The tariff of the two gas utilities is regulated by Ogra, which decides how much the companies generate by charging consumers and how much to spend in a given year.

An Ogra spokesman said a vital prerequisite to decide the tariff has been met and a final decision was expected soon. “We have held public hearings for both the companies.  I can’t give any specific date but decision will come any time now.”

He said the delay was due to the retirement of Mansoor Muzaffar as member Ogra. “Aamir Naseem has taken his place and we are moving ahead,” said the official. Naseem was appointed in December 2013.

Industry people say Ogra is facing a tough time in taking decisions since some issues like the unaccounted for gas (UFG) benchmark have become controversial.

The UFG, which is the loss of gas due to theft or leakages, has led to a FIA inquiry into allegations of stock manipulation, court cases and arrests.

SSGC and SNGPL have been repeatedly seeking extensions from the stock exchange, which is pushing them to comply with the rules.

The tariff model of the gas utilities came under scrutiny when reports appeared that someone leaked information on the UFG benchmark, which changed profit projections of the company.

Ogra allows a limit up to which the companies can record UFG and beyond that they are penalised through a reduction in the profit.

“There is confusion among Ogra officials and other government functionaries,” said an industry official. “No one wants to do anything.”

SSGC had posted a net profit of Rs1.6 billion in the nine months up to March 2013, whereas SNGPL incurred a loss of Rs2.1 billion during the same period.

Published in The Express Tribune, April 19^th, 2014.

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