ISLAMABAD, Oct 29: The Oil and Gas Regulatory Authority (Ogra) on Friday imposed a Rs77.5 million penalty on Sui Northern Gas Pipelines Limited (SNGPL) for failing to reduce its targeted system losses commonly known as unaccounted for gas (UFG).
In its short order, Ogra also rejected SNGPL's plea to increase its prescribed price by Rs1.43 per mmbtu (million British thermal unit) to meet its revenue shortfall of Rs609.4 million for the year 2003-04.
Ogra, however, allowed an increase of 14 paisa per unit (mmbtu) in the prescribed price of SNGPL by determining its revenue shortfall at Rs58 million. This increase in prescribed price will not be passed on to the consumers and will be adjusted against the government's gas development surcharge.
The regulatory authority reduced additions made by the gas company in its fixed assets by Rs866 million and consequently reduced depreciation by Rs25.98 million. The determination increase operating income of the company by Rs155.7 million on account of sale of scrap and disallowed donations amounting to Rs3.93 million by the company to various social schemes.
Ogra has also ordered an independent audit of the company's accounts to see whether the accounts presented to the regulatory authority were true. The total revenue requirement for 2003-04 has therefore been determined at Rs66.069 billion as against Rs66.464 billion claimed by the company, thereby reducing it by Rs395.5 million.
Clarification
KARACHI, Nov 1: The Sui Northern Gas Pipelines Limited (SNGPL) has clarified that it was neither fined by the Oil and Gas Regulatory Authority (ORGA) for failing to reduce targeted losses nor any independent audit of the company was carried out.
In a clarification faxed from Lahore, the SNGPL on Monday referred to a news item published in Dawn of October 30 and pointed out that the Regulator had fixed the target gas losses during transmission at 6.5 per cent of total gas available for sale through order issued on June 30, 2003 for the year 2003-04 against the actual loss of 8.19 per cent during 2002-03.
The SNGPL made extreme efforts to reduce the gas losses and the final accounts of the company for 2003-04 showed the loss of 6.65 per cent as against loss of 8.19 per cent for 2002-03. The difference of 015 has been disallowed by OGRA to be treated as operational losses. However, there is no question of imposition of penalty.
The SNGPL quotes section 27 of the licence given by the OGRA "In section by authority''. It says the Licensee shall permit any person duly authorized by the authority to carry out such inspection and examination of any of its assets or records may be required to be undertaken by the authority to comply with its functions or to exercise its powers under the Ordinance and the Rules. It makes it clear that under this section, Audit of Accounts of SNGPL is neither provided nor ORGA issued any direction in this regard.
The SNGPL has announced that its audited accounts are ready since mid-August and were held up due to revenue determination by the Regulator.
