OGRA decision: Honest bill payers to foot Rs11b bill of gas thieves

Insiders say cabinet had approved the summary in haste, without any detailed discussion.

ISLAMABAD:

The Oil and Gas Regulatory Authority (Ogra) has agreed to shift a burden of Rs11 billion onto paying consumers on account of gas stolen by unregistered consumers, as well as consumed under minimum billing and in areas with troubled law and order.

According to sources, the petroleum ministry wanted to pass on the burden of Rs22 billion to registered consumers, but the move has been resisted by Ogra.

The cabinet had accorded approval to shift the burden of gas stolen by non-consumers, minimum billing and consumption of gas in areas with poor law and order as well as by consumers who get direct gas supply without any meter. Insiders say that the cabinet had approved the summary in haste, without any detailed discussion on this issue.

If the entire burden is shifted, consumers will have to pay for around 29.4 billion cubic feet gas in a year – which amounts to around 8% of the total gas supply.

However, officials said that the cabinet had directed Ogra and the petroleum ministry to place a cap on these heads by formulating guidelines.

“Now, the petroleum ministry wants to place a cap at 4% (Rs22 billion) to be charged from registered consumers whereas Ogra wants to lower the cap to 2% (Rs 11 billion) a year,” sources said, adding that, in a recent meeting, the petroleum ministry high ups and Ogra officials entered into a deadlock over the issue.

“The petroleum secretary has called another meeting on Monday to finalise the cap issue,” sources added.



The volume of gas used by non-registered consumers and on the basis of minimum billing is historically disallowed by the regulator as it is not accounted for.

Ogra recently allowed only 4.5% Unaccounted for Gas (UFG) for SNGPL against an earlier 11%.

“This plan will also help high-ups of gas utilities to strike under-hand dealings of gas supply as non-consumers [and] will have no record of the supply [while] registered consumers would be paying the bill,” sources said.

The petroleum ministry said that Ogra disallowed certain UFG which eroded the profitability of the companies. Gas companies attribute the loss to the expansion of the distribution network on political grounds. They say that, in areas affected by law and order issues, consumers do not pay bills, but the companies have to continue the gas supply in view of the socio-political situation.

In 2011-12, the volume of gas pilferage by unregistered consumers was 11.17 billion cubic feet and 2.06 billion cubic feet in the networks of SNGPL and SSGC, respectively. People residing in areas with a poor law and order situation consumed 3.98 billion cubic feet of gas.

Gas companies say that meter-reading in areas with poor law and order is not possible, adding that, in most cases, consumers have altogether removed their meters.

Published in The Express Tribune, December 9^th, 2012.