ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) on Wednesday determined up to Rs96 per unit increase in the prescribed price of gas utilities, allowing them to charge about 6.3 per cent system losses to consumers.

Ogra forwarded two separate determinations to the federal government for a decision on subsidy factor for various consumer categories within 40 days. Nevertheless, Ogra determined increases with effect from July 1.

Ogra allowed 5pc unaccounted-for gas (UFG) losses to the two companies as recommended by independent consultants – KMPG Taseer Hadi & Co – instead of its own previous benchmark of 4.5pc. It also allowed 1.3pc additional UFG to gas companies on account of local conditions like theft, law and order, low recoveries and other inefficiencies against 2.6pc proposed by the consultant.

In case of Sui Southern Gas Company Limited (SSGCL), Ogra determined a tariff increase of Rs96.34 per million British thermal unit (mmBtu) instead of Rs114 per unit demanded by the company. As such, its average price was worked out at Rs404 per unit against Rs422 per unit claimed by the company.

SSGCL claimed its unaccounted-for gas (UFG) losses at 5.56pc while Ogra determined such losses 13.23pc for 2017-18.

In case of Sui Northern Gas Company, the regulator determined an increase of Rs60.25 per unit against demand for Rs96.4 per unit increase. The average prescribed price for the company was determined at Rs455.2 per unit against Rs573 per unit demanded by the company. It claimed existing system losses at 9.21pc.

The independent consultants had suggested allowing up to 7.1pc UFG allowance to gas utilities in consumer tariff for the next five years with tight targets for their gradual decline. The consultant had said the 5 percent UFG benchmark recoverable from consumers was the highest in comparable gas markets across the world.

The regulator said that performance of the gas companies would be validated against key monitoring indicators (KMIs) through an annual review while the companies would be required to submit five-yearly KMI implementation plans for yearly reviews by the regulator.

Published in Dawn, September 21st, 2017