ISLAMABAD, March 28: The two gas utilities — SSGCL and SNGPL — have sought a further increase of Rs30 and Rs14 per unit, respectively, in the natural gas tariff for all consumers with effect from July 1, 2006, it is learnt. The Oil and Gas Regulatory Authority (Ogra) has formally admitted petitions filed by the Sui Southern Gas Company Limited (SSGCL) and Sui Northern Gas Pipelines Limited (SNGPL) for public hearing early next month, a senior Ogra official told Dawn on Tuesday.
The official said the two utilities had together estimated a shortfall of about Rs19.2 billion in revenue during the first six months (July 1 to December 31, 2006) of the next fiscal year and wanted to bridge this shortfall to ensure 17.5 per cent and 17 per cent guaranteed rate of return.
Both the companies have quoted increase in wellhead price of gas owing to its indexation with the international oil price, inflation and operation and maintenance cost as reasons for the proposed increase in tariff.
The SSGCL says it is expecting a revenue shortfall of Rs10.590 billion during the next fiscal year. Hence, it has demanded an average increase of about Rs29.36 per MMBTU (million British thermal units) in gas tariff. However, the overall increase in the SSGCL’s tariff has been calculated at Rs37.51 per MMBTU, because the company has proposed to maintain the existing rates for domestic consumers.
Similarly, the SNGPL has estimated a revenue shortfall of Rs8.622 billion during the next fiscal year. As a result, it has demanded an increase in tariff by Rs13.94 per MMBTU with effect from July 1, 2006.
Ogra has already allowed about 32 per cent increase in gas prices to the two utilities during the current fiscal year in two phases on July 1, 2005 and January 1, 2006 as part of its biannual tariff revision.
The petitions for revision in gas prices have come at a stage when Ogra, on the prime minister’s directives, is investigating complaints of excessive billing.
Ogra sources said it had so far received more than 2,000 complaints of excess billing for the month of January 2006. The gas companies have informed Ogra that complaints of higher gas bills were coming owing to gas tariff increases with effect from January 1, 2006, comparatively higher gas consumption due to extreme winter and application of higher-price consumer slabs.
For example, they argue that normally most consumers fall in the first domestic category of Rs81 per cubic feet, but suddenly move into the second and third category of Rs148 and Rs236 per cubic feet, owing to higher consumption for water and room heating.
These sources said Ogra was required to submit a report on excess billing to the prime minister on Thursday, but no tangible fault on part of the gas utilities had been found as most of the factors were beyond their control and were based on measures approved by the government and Ogra.
