SSGC hopes to slash gas theft, leakage by 2% this year

If successful, the drive will boost utility’s profits by Rs3 billion.

ISLAMABAD: Sui Southern Gas Company (SSGC) has said that it expects to reduce unaccounted for gas (UFG) – the difference between the quantity of gas received by consumers and the quantity it sells – to 9% this year.

“We hope to cut UFG to 9% this year, a decrease of more than two percentage points over last year,” a senior official of the company said, adding the reduction in UFG is expected to add Rs3 billion to the company’s profits – a good sign as far as the utility’s financial health is concerned.

SSGC faces unfavourable conditions in ‘franchise areas’ especially Balochistan, which consumes 9% of total gas supplied by the company and contributes 40% to the overall UFG, the official said. He went on to say that reducing the UFG will be a significant achievement, especially in the wake of persistent imbalance between the demand and supply of natural gas.

SSGC has taken a major leap forward in curbing UFG despite adverse conditions prevailing where it operates. Measures aimed at curbing theft and plugging leakages and an elaborate meter replacement drive have produced encouraging results.

A number of factors had contributed to rising UFG levels in recent years, including population shift to urban centres leading to a phenomenal growth in unregistered consumers. Other factors included underground and overhead gas leakages, measurement errors, shift in revenue share in favour of retail from bulk, theft, third-party damages and a volatile law and order situation.

The official said that previously, bulk sales constituted 54% of total sales, while the rest were retail sales.

“We believe that UFG would have stood at 6%, had the revenue ratio been stayed in favour of bulk sales,” the official said, adding bulk consumers now accounted for 28% of total sales, while 72% of gas was sold to retail consumers, which pushed up UFG by three to four percentage points.

In line with the government’s vision, the SSGC had undertaken an ambitious programme of segregating the distribution network into manageable units to ensure greater efficiency, transparency and accountability in operational activities.

Additionally, introduction of new technologies including smart meters, especially for industrial and commercial consumers, laser leak-detection devices and cyber locks along with investment in human capital aided the SSGC in reducing UFG.

SSGC had completed two pilot projects, under which 100 smart meters were installed.

“After the success of the pilot projects, SSGC floated a tender seeking bids for installing 10,000 meters to halt gas theft by commercial, compressed natural gas (CNG) and industrial consumers in a bid to reduce UFG,” the official said.

Published in The Express Tribune, June 21^st, 2013.

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