ISLAMABAD, Sept 15: The Oil and Gas Regulatory Authority (Ogra) is striving to balance the divergent interests of stakeholders, mainly consumers, investors and the government, in accordance with the law and in the best interest of public at large.
This was stated by Ogra Chairman Munir Ahmad while presiding over a public hearing here on Thursday. The authority was hearing a petition filed by Sui Northern Gas Company Limited (SNGPL) for the determination of its total revenue requirement for the financial year 2004-05. The hearing was attended by media, consumer groups, interested parties and general public.
The public hearings are conducted to ensure transparency in the process of price setting of gas and taking into account concerns and observations of all the stakeholders. Beside the Ogra chairman, the petition was heard by Jawaid Inam, member (gas), and M.H. Asif, member (finance).
The representative of SNGPL made a detailed presentation on the petition. He also responded to a number of questions raised by the professionals of Ogra.
SNGPL initially filed a petition with the authority on Dec 31, 2003 for the determination of its estimated revenue requirement for FY2004-05 under section 8 (1) of the Ogra Ordinance and sought an increase in the prescribed gas price by Rs11.27 per mmbtu with effect from July 1, 2004 in order to meet a shortfall in the estimated revenue requirement.
The authority after analyzing the petition allowed a provisional increase of Rs8.42 per mmbtu, as against Rs11.27 per mmbtu sought. Subsequently, the petitioner filed a review petition against the said decision under section 13 of the Ogra Ordinance and sought a total increase of Rs14.16 per mmbtu mainly due to an increase in the cost of gas based on a sharp increase in the international oil price to which the prices of gas payable to producers is linked.
The authority had passed an interim order on Dec 23, 2004, allowing an increase in the average prescribed price on provisional basis of Rs12.01 per mmbtu effective from February 2, 2005.
Now SNGPL has submitted a petition under section 8 (2) of the Ogra Ordinance for the determination of its total revenue requirement on the basis of initial accounts by an external auditor for FY2004-05 and sought a downward adjustment in its prescribed gas price by Rs0.83 per mmbtu effective from July 1, 2004.
Winding up the hearing, the Ogra chairman said that it was the duty of the authority to maintain a judicious balance between the interests of utility companies and consumers and added that the authority would thoroughly scrutinize all costs with the help of a team of engineers and financial and legal experts.
He further said that their tangible suggestions would be given due consideration during the decision-making process. The Ogra chairman appreciated certain initiatives taken by SNGPL in reducing the UPG. He, however, pointed out that it still required major efforts to meet the target fixed by Ogra.
The Ogra was established by the federal government under the Ordinance No XVII of 2002. It, inter alia, is empowered to determine the revenue requirement of gas companies.
