LAHORE: The Lahore High Court’s decision to confess a petition of the Sui Northern Gas Pipelines Limited (SNGPL) versus its regulator, the Oil and Gas Regulatory Authority (Ogra), might have some financial ramifications on the non-export sector as well as the pressed gas (CNG) industry.
However, there would be no effect on the domestic, industrial and also 5 zero-rated export markets.
“Exactly how will certainly the firm recuperate cash from the customers (basic market and CNG terminals in Punjab as well as Khyber Pakhtunkhwa) when it has actually currently billed them on the basis of the previous unaccounted-for-gas (UFG) rates figured out by Ogra,” questioned All Pakistan CNG Association team leader Ghayas Paracha.
Speaking with Dawn, Mr Paracha said Ogra had set the SNGPL’s UFG rate at 6.5 percent– equal to that of the indigenous gas– and also fixed consumer cost on the basis of that rate. Nonetheless, the firm began charging customers as per the Ogra alert, which it later challenged in the Lahore High Court.
“It will certainly be devastating for us because the CNG sector is already in terrific problem as a result of the repeated disturbances in supply, prices, non-import of the melted natural gas etc. It seems impossible,” he added.
On the other hand, the business has actually notified the Pakistan Stock market and the Securities and also Exchange Compensation of Pakistan about the history of the situation and the court’s choice.
“Based on Area 96 of the Securities Act 2015 and also Provision 5.6.1(a) of PSX regulations, we hereby convey to you that while establishing the [re-gasified liquefied natural gas (RLNG)] prices, the regulatory authority, considering that August 2020, has diverged from the decision of the Economic Sychronisation Committee of the cupboard and also began using consolidated system gas UFG standard on the RLNG customers of the distribution segment. The regulatory authority, nonetheless, really did not think about the fact that the standard of the system gas customers is a consolidated benchmark as well as applies to both transmission as well as circulation consumers, for that reason, can not be related to one section i.e. circulation only,” the firm mentioned in a letter composed on Monday.
It stated the business, being aggrieved by the regulatory authority’s choice, filed a request in the court testing the RLNG rate resolution. “On July 19, Monday the ethical court wrapped up the instance after listening to both the celebrations in detail as well as announced in the open court that the SNGPL’s request is allowed,” it added.
The decision, according to the letter, will certainly nevertheless not influence the economic results already delcared for the initial quarter that ended on Sept 30, 2020 as the firm was confident of a good decision.
Talking with Dawn, an official resource stated the decision would certainly not influence the residential consumers as they were already getting gas on subsidised rates. Similarly, all five zero-export industries (that take in bulk of the industrial products) will certainly additionally not be impacted by this decision as they were already being supplied RLNG on diminished rates.
“Nevertheless, there will certainly be a very low impact on some commercial fields that eat low volumes,” he added.
According to another main resource, Ogra while figuring out the RLNG rate had reduced the UFG benchmark to 6.3 computer for circulation and 0.3 pc for transmission as opposed to enabling the actual UFG based on past technique in line with the policy guidelines of the federation.
“This cost applied from Aug 20 resulting in excessive monetary worry on the firm. Being hurt from the Ogra determination, we came close to the high court that enabled the SNGPL application,” he stated.