PESHAWAR: By issuing a stay order, a Peshawar High Court bench has temporarily directed the Sui Northern Gas Pipelines Limited (SNGPL) not to collect higher tariff from a leading cement company.

Justice Roohul Amin Khan Chamkani and Justice Qalandar Ali Khan also sought written response from the petroleum secretary, Oil and Gas Regulatory Authority (Ogra) and SNGPL to the petition filed by the Lucky Cement Limited challenging the Oct 4, 2018, Ogra notification for the 142 percent increase in gas tariff.

The respondents in the petition are the federation of Pakistan through petroleum secretary, Ogra through its director general, SNGPL through its managing director, general manager SNGPL- Khyber Pakhtunkhwa, Sui Southern Gas Company Limited (SSGC) through its MD

PHC asks govt, regulator to respond to petition against 142pc hike in gas rate

Shumail Ahmad Butt, lawyer for the petitioner, said the Ogra had issued the impugned notification without fulfilling legal requirements.

He said tariff was proposed to be increased by the Economic Coordination Council (ECC) on Sept 27, 2018, and not by the federal cabinet, which was a requirement in light of the recent Supreme Court judgement.

The lawyer said after the impugned notification together with its determination/decision in ERR (Estimated Revenue Requirement) 2018-19 from the SNGPL of June 2018, the price of natural gas for industries was increased at the rate of 142 per cent, which was illegal and beyond mandate of Ogra.

He said the earlier increase in gas tariff was struck down by the Sindh High Court and that the government filed the leave to appeal petition against it but the Supreme Court didn’t issue interim order in favour of the government and SNGPL.

The bench directed additional advocate general Arbab Saiful Kamal to file replies to the petition on behalf of the respondents before the next hearing fixed for Nov 20.

It also asked the SNGPL not to recover the 142 per cent increase in gas tariff from the petitioner through monthly bills.

The petitioner requested the court that the impugned notification of Ogra together with the determination/ decision in ERR 2018-19 of June 21, 2018, be declared illegal and without lawful authority.

Mr Shumail Butt said under the law, the SNGPL and SSGC were bound to charge all its consumers, including the petitioner, a tariff duly notified by Ogra in terms of Section 8 of the Ogra Ordinance 2002.

He added that before notifying any tariff, the Ogra and the ministry of petroleum had to undergo a thorough process of hearing, determination, advice and re-advice in terms of sections 7, 8 and 12 of the Ordinance.

The lawyer said previously, the gas tariff was notified on Jan 1, 2013, for captive power at a flat rate of Rs573.28 per MMBTU, which was a violation of Section 8 of the ordinance, and therefore, that notification was challenged in the high court.

He added that the petition was pending with the court, which had granted interim relief to the petitioner.

The lawyer said on Aug 31, 2015, a notification was issued exorbitantly increasing gas tariff to Rs600 per MMBTU.

He added that the arbitrary increase was also challenged in the court, which granted an interim relief and directed the SNGPL to charge the petitioner at the previous rate on furnishing indemnity bonds.

Mr Butt said the 2015 notification was also challenged in the Sindh High Court, which had set it aside on May 18, 2016, under Section 8 of the Ordinance read with the National Gas Tariff Rules, 2002.

He said while the earlier petitions had still been pending the SNGPL and SSGC purportedly under Section 8 (1) of the Ordinance filed a petition with the Ogra for the Determination of Estimated Revenue Requirement (DERR) for financial year 2018-19.

The lawyer said the Ogra while ignoring altogether requirements of law and objections so made by different interveners allowed the petition through its Determination (Judgment and Order) on June 21, 2018.

He said against the average prescribed price of Rs455.21 per MMBTU so determined for financial year 2017-18, the Ogra determined the average prescribed price of Rs629.33 per MMBTU.

The lawyer said while deciding the sectorial tariffs, the Ogra had discriminated against both the Cement industry as well as the Captive Power consumers and has proposed Rs975.54 per MMBTU and Rs780.43 per MMBTU, respectively without giving any reason for burdening these two sectors.

Published in Dawn, November 17th, 2018