Decision on gas rate hike in three days: Ogra concludes hearing
By Our Staff Reporter
ISLAMABAD, July 31: The Oil and Gas Regulatory Authority (Ogra) ruled on Wednesday that it would decide the reasonability of rate of return to gas utilities as the existing guaranteed return approved by the federal cabinet was not applicable for centuries.
Concluding the public hearing of the Sui Northern Gas Pipelines Limited’s (SNGPL’s) request for 7.78 per cent increase in its tariff, Ogra chairman Munir Ahmad also gave an assurance to the participants that their interests would be protected at the time of determination of tariff.
He held that fixed rate of return approved by the federal cabinet for the Sui Southern Gas Company Limited (SSGCL) and the SNGPL about 10 years ago could not be carried on for centuries and now the Ogra would have to look into their reasonability.
Munir told Dawn that Ogra would announce the determination of tariff on the requests of both Sui Southern and Sui Northern gas companies on the same day within next three days.
He said the government had all the powers to issue policy guidelines on any subject but these guidelines should not be violative of the Ogra Ordinance.
The authority chairman said although Ogra had recently become operational and could not be expected to be perfect, it would continue to consult the general public and all the other stakeholders before making a final decision on tariff matters.
He said it was noted that different accounting procedures adopted by the two gas utilities was confusing the shareholders and the consumers. However, the Ogra had already hired consultants to introduce uniform system of accounts and a report towards that end would be available shortly, he added.
Ogra, he went on to say, was currently going through the analysis of various oil and gas agreements because it wanted to abide by all the existing agreements between the government and the investors.
Transitional process of shifting from a government regulated petroleum sector to a private sector under an independent regulated, he further said, would be carried out with due care and due diligence to do justice between the interests of the consumers, the investors and the government.
The Ogra hearing on the SNGPL’s request for 7.78 per cent increase in its tariff was concluded in three days and around 10 interveners, including the Federal Planning Commission opposed the proposed increase.
Other interveners included: Gharibwal Group, Bestway Group, Pak-America Fertilizer, Dawood Hercules, Enerman Group, All Pakistan Pottery Manufacturers and Quality Advisors on behalf of the common consumers.
One of the interveners contended that the SNGPL did not have a licence required under section 8 of the ordinance and, therefore, had no right to file a petition before Ogra and, hence, its petition should be dismissed.
