March 18, 2003	Tuesday	Muharram 14, 1424

KARACHI, March 17: Federal B. Area Association of Trade and Industry (FBATI) has urged the Oil and Gas Regulatory Authority (Ogra) not to give any importance to the petition of SSGC demanding increase of Rs19.17 per mcf until the gas company reduces its expenditure.

The association also asked the government not to give mandatory profit to the SSGC until it reduces its line losses, unwarranted expenditures, unnecessary appointments and unwanted luxuries.

The chairman, Power and Gas Sub Committee, FBATI, M. Muzzamil Hussain, in a statement, said the SSGC has seen nine managing directors in 14 years. Since 2000, a new trend has developed to bring the MD from outside and the present MD is the second in three years.

He claimed that the current MD did not belong to the oil and gas industry and was unable to understand the problems of consumers.

SSGC’s expenditures sky-rocketed in 2000 due to increased salaries of officers, which was followed by rise in line losses and transmission and distribution expenditures, forcing the company to seek tariff hike in 2001-2002, but the request was declined by the Ogra.

He said that the line losses were running into Rs2.650 billion. Contract executives were kept by the previous MD and confirmed by the current MD resulting in extra expenditure of Rs40 million.

Hussain said new appointments are made resulting in loss of Rs80 million, besides millions of rupees losses in other transactions.

“If a utility company cannot control its losses then why the government is bound to still give a mandatory 17 per cent profit on average net operating fixed assets,” he said.

He said that the company claimed a profit of Rs900 million during six months of 2002-2003 and it is likely to achieve an annual profit of Rs2 billion then why the SSGC has asked for tariff increase. This demand was only aimed at meeting the losses and to provide the company with 17 per cent guaranteed profit, he said.