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Rs51b burden likely on gas consumers: Ogra working out new tariff mechanism under ECC guidelines

Rs51b burden likely on gas consumers: Ogra working out new tariff mechanism under ECC guidelines

ISLAMABAD: Gas-starved consumers are likely to bear the burden of more than Rs51 billion as the Oil and Gas Regulatory Authority (Ogra) is working out adjustment in consumer tariff, along with its existing tariff determination in the light of policy guidelines issued by Economic Coordination Committee (ECC) of the Cabinet. The new mechanism is likely to increase consumer tariff significantly.

It is to be recalled that the ECC had decided to issue new policy guidelines to Ogra in its meeting on Nov 20, but on the very next day, Prime Minister Nawaz Sharif rejected the gas tariff increase and deferred a final decision on the issue.

As per reports, Ogra would effectively double the amount of system losses to be charged from consumers and dilute the ongoing investigations into Rs82 billion Ogra scandal case ordered by Supreme Court since previous government of the PPP.

It is to be note that the SNGPL is yet to refund Rs13 billion as ordered by the Lahore High Court on account of higher unaccounted for gas (UFG) charged to consumers about four years ago.

The new directives envisage volumes pilfered by non-consumers but detected and determined by the companies in accordance with Ogra procedure as provided in Rule 30 of natural gas licencing rules, 2002, volumes consumed in law and order affected areas and impact of change of bulk-retail ration on UFG using the base year as 2003-04.

The guidelines asked the Ogra to complete UFG study as soon as possible but desired that the issue of treatment of incomes form non-core activities, like late payment surcharge, meter manufacturing plant, royalty from JJVL and sale of condensate/LPG may be dealt with at the time of finalisation of new tariff regime.

Former Ogra chairman Tauqir Sadiq and its two former members were accused of increasing UFG from 4.5pc to 7pc and have been facing court cases since then.