April 26, 2006	Wednesday	Rabi-ul-Awwal 27, 1427

ISLAMABAD, April 25: The Oil and Gas Regulatory Authority (Ogra) on Tuesday came under criticism from consumers for allowing 17.5 per cent guaranteed rate of return on assets to Sui Northern Gas Pipelines Limited, as it started hearing for a proposed seven per cent increase in gas tariff.

Ogra Chairman Munir Ahmad, however, did not allow detailed arguments over the 17.5 per cent rate of return to SNGPL, saying the issue had been settled at the time of issuance of licence to the company and should not be reopened now.

He also said Ogra had already taken up the subject of reviewing the rate of return with the government and the rates would changed once Ogra received legally valid comments from all the stakeholders.

Khaliquzzam Khan, an advocate representing the All Pakistan Textiles Mills Association, however, insisted that it was Ogra’s obligation to take a fair decision within a reasonable time period and should not wait for years for the government to come out with its views.

Fareed Piracha, a Jamaat-i-Islami MNA from Lahore, spoke on behalf of the consumers and challenged the legality of Rs20 per month meter rent being charged by SNGPL for which the consumers were required to pay full cost of the meters even before the gas connection.

He said the consumers should not be forced to pay the price for line losses which were a fault of the company, non-payment of gas bills by the public departments, gas thefts, destruction of gas equipment and pipelines in Balochistan and elsewhere as a result of law and order problems.

Mr Piracha suggested that Ogra should refer to the Islamic Ideology Council (IIC) the subject of profit taking by the government and its gas companies from the public at large because it was against the spirit of Islam and constitution of Pakistan. He was of the view that the government could not earn profit on water, air and gas from the public at large.

The actual wages in Pakistan, he said, had declined by six per cent and purchasing power had dropped by over 20 per cent in the last couple of years as reported by international agencies and hence further increase in gas rates should not be allowed to SNGPL.

A representative of the Faisalabad Textile Processing Mills Association also opposed the proposed increase in gas tariff and said it would make Pakistani textile products uncompetitive in the international market.

Criticising the subsidy policy of the government, he said if the government wanted to subsidise certain section of consumers, it should finance this through budget and not through raising tariff for industrial consumers.

Earlier, SNGPL demanded Rs16.18 per mmbtu (million British thermal units) increase in gas rates for all consumer categories, saying the wellhead cost of gas had increased by 28 per cent as a result of its indexation with international oil prices.

SNGPL said its bill collection charges had increased by 429 per cent during the last few years because all banks had started charging Rs10 per bill and added that the Cabinet Committee on Energy had not been able to convince the banks to reduce these charges over the last seven to eight years.