Regulator starts consultation on gas tariff structure

Published: December 1, 2017
A gas burner is pictured on a cooker. PHOTO: REUTERS

A gas burner is pictured on a cooker. PHOTO: REUTERS

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra), in collaboration with the World Bank, has kicked off a series of consultative sessions across the country for the Third Party Access Rules 2012 and the tariff structure under gas sector reforms.

In this regard, the first session was held in Peshawar on Thursday, which was chaired by Ogra Chairperson Uzma Adil Khan.

Speaking on the occasion, Khan said, “We have initiated these consultative sessions for the input of all stakeholders which include provinces, Sui gas companies, lawmakers and consumers. The authority will look into the valid arguments and address the concerns, if any.”

A World Bank consultant gave a comprehensive presentation on the third-party access rules and network code whereas Ogra Executive Director Misbah Yaqub gave presentation on the tariff regime. At the end of the presentations, the stakeholders raised a number of queries which were recorded.

Government rules out gas price increase from July

The government has tasked Ogra with finalising third-party access rules and a tariff methodology by the end of December this year in an effort to execute the plan of splitting large public gas utilities as part of critical reforms.

Talking to The Express Tribune recently, a senior government official said the Ministry of Energy (Petroleum Division) had decided to set firm timelines for putting in place the third-party access rules and tariff structure for new gas companies.

Gas utilities – Sui Northern Gas Pipelines and Sui Southern Gas Company – are being split in order to secure funds from the Asian Development Bank (ADB) and World Bank. The government has directed the utilities to hire a transaction adviser for conducting due diligence.

Under the plan, the government, facilitated by the World Bank, will separate transmission and distribution segments of the gas companies by setting up a transmission company and four distribution companies. The aim is to bring efficiency in service delivery and reduce losses.

Gas firms allowed to recover more losses from consumers

However, the process, which was planned to be completed by the end of June 2017, has been delayed and is expected to be completed next year.

At the consultative session, a large number of stakeholders including representatives of Sui Northern Gas Pipelines, Khyber-Pakhtunkhwa Oil and Gas Development Company, K-P Chamber of Commerce and Industry, parliamentarians, lawyers and general consumers were present.

Consultative sessions will now be held in Lahore, Karachi, Quetta and Islamabad.

Published in The Express Tribune, December 1st, 2017.

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