ISLAMABAD: In the face of demand from gas utilities to raise their prescribed price and metre rent by up to 123% and 100% respectively, the Oil & Gas Regulatory Authority (Ogra) has agreed to get gas metre checks carried out by neutral third parties rather than by gas firms themselves.
The Ogra will take up the petition submitted by Sui Southern Gas Company (SSGCL) for Rs79 per million British Thermal Unit (MMBTU) at a public hearing on Monday (today) or for a rise of around 11pc in its prescribed price to meet its projected revenue requirement (ERR) during the current fiscal year (2020-21).
According to Ogra, the SSGCL announced to the regulator that during the current year its prescribed price was expected to average Rs822.25 per MMBTU (unit) from the current cost of Rs743.25 per unit, hence the need for an increase in its price of Rs79 per unit. This will give the Karachi-based gas utility servicing Sindh and Balochistan additional revenue of around Rs28.24bn.
Utilities seek increase in price and meter rent by up to 123pc and 100pc, respectively
This will be followed on Thursday (November 26) by another public hearing on a petition lodged by Sui Northern Gas Pipelines Limited (SNGPL) for a rise of Rs774 per unit (123pc) in its prescribed ERR prices for FY2020-21, including previous years’ unrecovered price dues. The SNGPL has also sought a rise of about 100pc in its monthly metre rent.
The SNGPL said according to Ogra, that its average prescribed price for FY2020-21 was Rs1,405 per unit, up from the current Rs631.41 per unit cost. The requested increase of Rs773.50 per unit is approximately 123pc higher than the current cost. This is expected to yield increased revenue of around Rs250bn. This comprises approximately Rs36bn of new funds owing to the FY2020-21 sales deficit and approximately Rs215bn from previous years.
Moreover, for the current fiscal year the SNGPL measured the cost of operation of re-gasified liquefied natural gas at Rs72.33 per container. The same day, on October 15, both companies filed their applications, which were then amended on November 4.
Ogra has oddly withheld the filing of tariff petitions on its website by both utilities on a topic that would affect a significant number of manufacturing, commercial, domestic, fertiliser, cement and other gas and RLNG users. In virtual view of the Covid-19 hazard, Ogra will hold public hearings, but it requested interveners to receive hard copies after paying Rs2 per page fees.
On the other side, the authority has also agreed to induce neutral third parties to test gas metres in theory. The regulator was in an advanced phase of formally inviting expressions of interest (EOIs) to employ independent credible parties to provide gas metre testing services, a senior Ogra official said.
The official claimed that a number of gas customers were seeking impartial gas metre monitoring rather than current testing procedures by the gas providers themselves, pointing out conflicts of interest.
It was in this sense that Muhammad Arif, a member of Ogra’s gas, recently tried to verify the probability of ‘third-party certification’ of SSGCL and SNGPL gas metres from the Pakistan Council for Science and Industrial Research (PCSIR), the Pakistan Atomic Energy Commission (PAEC), the Pakistan Hydrocarbon Institute (HDIP), the Geneva-based SGS testing and certification firm or some other metre testing firm.
According to officials, since the creation of Ogra more than two decades ago, the two gas utilities themselves have been calibrating, installing, de-installing and checking customer gas metres in their own testing workshops and on the basis of their own opinion, making accusations against customers.
“This practise is unfair and unreasonable and on various occasions has been repeatedly objected to by customers,” the gas member is stated to have said, noting that “even under the eyes of law, no one can be both prosecutor and judge at the same time.”