ISLAMABAD: Although the government is yet to increase gas tariff, the two gas utilities – SNGPL and SSGCL – have increased security fee for all domestic consumers by 200 per cent with immediate effect to generate Rs13 billion during the current year.
As a consequence, security deposit for domestic consumers has been increased from Rs1500 to Rs4500 that would be recovered in six monthly installments along with routine bills. The two companies have already charged first installment of Rs448 from all consumers during the current billing month while the remaining Rs2,552 would be recovered in subsequent five billing months.
The decision would yield about Rs9bn to Sui Northern Gas Pipelines Limited (SNGPL) and Rs5bn to Sui Southern Gas Company Limited (SSGCL).
A senior official of the Sui Northern Gas Pipelines Limited (SNGPL) told Dawn that recovery of first of the six installments had been started following proper approval of the Oil and Gas Regulatory Authority (Ogra) on July 5.
He said the commercial and industrial consumers were already required to keep with gas companies a security deposit equivalent to three months of their highest consumption to provide a cushion to the gas companies in default cases.
“The security deposit for domestic consumers has been increased for the first time,” he said.
He said the security deposit for domestic consumers was fixed at Rs1,500 in 1994 and is charged to consumers at the time of fresh connection.
The Ogra had already allowed gas companies to increase security deposit for fresh connections to Rs4,500 to rationalise companies’ risk factor in line with fresh market conditions.
However, in view of rising rate of unaccounted for gas (UFG) losses, the default risk of the gas companies had increased. As a result, gas companies demanded during recent public hearing in the matter of revenue requirements before the Ogra and separately with the federal government to bail them out from a looming default and negative equity through increase in security deposit for existing consumers as well.
The two gas companies have been seeking increasing security deposit to equivalent to three winter months, being peak consumption period but this was not acceptable to the Ogra.
Following a series of meetings between the Ogra top brass and the ministry of petroleum, the Ogra, however, agreed to allow recovery of increased security deposit at Rs4,500 to provide for doubtful debt of the gas companies.
An official, however, said the annual doubtful debt was on the lower side and should have not been compensated with Rs13 billion cash.
For example, he said the annual doubtful debt of the SNGPL stood at Rs2bn, but it would earn about Rs9bn through security deposit in one go.
He said the gas companies have also been allowed to charge a reconnection fee of Rs400 if the gas supply had been disconnected due to non-payment of bills.
The government is in final stages of firming up a Rs22 per unit increase in electricity tariff for all consumers to generate another Rs18bn for the gas companies.