Several critical questions may be answered in the event former Oil and Gas Regulatory Authority (Ogra) chief Tauqeer Sadiq is arrested – such as who forced Sadiq to raise the gas theft ceiling, allowing stockbrokers to pocket close to Rs44 billion.
The former Ogra chief may also disclose the names of stockbrokers who met him before he decided to raise the ceiling of unaccounted for gas (UFG) to 7% from 5% on September 24, 2010.
According to sources, Ogra had decided to allow gas utilities, including Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company (SSGC), 5% UFG for the 2009-10 revenue requirements.
“Before announcing the decision, however, Sadiq received a threatening phone call from a government bigwig, who demanded the then Ogra chief raise the UFG ceiling to 7% or prepare to lose his job,” they said. They added that another official in the present government also met the former Ogra chief in December 2010 to reiterate the demand. The official threatened Sadiq that the National Accountability Bureau (NAB) would open cases against him if he declined the demand.
According to a NAB report submitted to the Supreme Court, stock manipulation during the 45 days the UFG ceiling was kept at 7% has cost the state exchequer around Rs44 billion. The report revealed that several stockbrokers had prior knowledge of the increase allowing them to make billions when SNGPL and SSGC’s share prices went up. After the UFG ceiling was raised to 7%, the companies’ share prices increased to Rs36 from Rs16.
While UFG ceiling is kept between 1% and 3% internationally, Pakistan’s higher ceiling already accounts for losses close to Rs12.5 billion a year, an amount which is recovered from consumers.
What is UFG?
The unaccounted for gas (UFG) is the difference between the total gas available from all sources, and the total gas accounted for as sales, net interchange, and company use. The difference includes leakage or other actual losses, discrepancies due to meter inaccuracies, variations of temperature and/or pressure, and other variants, particularly due to measurements being made at different times. In cycle billings, an amount of gas supply used but not billed as of the end of a period Source: TermWiki
Published in The Express Tribune, January 11th, 2013.
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