Govt orders another probe into domestic gas tariff hike

Updated March 07, 2019

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SNGPL has been directed to report as to “who authorised to charge the pressure factor beyond the Ogra approved limit”. — AFP/File
SNGPL has been directed to report as to “who authorised to charge the pressure factor beyond the Ogra approved limit”. — AFP/File

ISLAMABAD: The government on Wednesday ordered another investigation to ascertain who had allowed unauthorised pressure factor in natural gas tariff that led to excessive billing to domestic consumers of gas companies, particularly the Sui Northern Gas Pipelines Limited (SNGPL).

According to a notification issued by the petroleum division of the Ministry of Energy on the instructions of the prime minister, the acting managing director of SNGPL has been directed to report as to “who authorised to charge the pressure factor beyond the Ogra approved limit” in consumers’ bills.

The notification said the Oil and Gas Regulatory Authority had vide its Feb 27 determination of estimated revenue requirement for the fiscal year 2018-19 already ordered passing on the reversal/adjustment to the affected consumers due to application of pressure factor above eight-inch water column.

The SNGPL chief had also been conveyed the desire of the prime minister to report steps taken for adjustment/reimbursement of extra amounts charged to the consumers due to the pressure factor and fix ‘responsibility not below the rank of general manager or manager”.

Separately, Minister for Petroleum Ghulam Sarwar Khan informed the Senate on Wednesday that the reimbursement of overcharged amount would begin next month and action would be taken at the highest-level against those responsible for the ‘wrongdoing’. “Theft has been detected, thief is being identified and what has been stolen has to be recovered,” he said.

The minister said a probe committee headed by the additional petroleum secretary concluded in its investigation that the higher pressure factor had been applied to about 50 per cent consumers at a rate of 1.097pc and two gas companies had benefited to the extent of 5-7pc in revenue. He said the committee had got inspected many regions through a random check on the basis of which the prime minister ordered reimbursement.

Last week, Ogra had expressed displeasure over incorrect application of the pressure factor in domestic consumers’ gas bills by the SNGPL and ordered reversal/adjustment of higher collections made during the period between July 2018 and February 2019. The company was also directed to strictly follow the standard and stop application of the pressure factor above eight-inch water column in domestic consumers’ gas tariff in future.

“In case of non-compliance, the volume booked by the SNGPL by the application of said pressure factor, which is not in compliance with the consumer contract shall be reversed in the final revenue requirement,” the regulator said.

The government had early last month ordered two separate investigations into the matter, including an audit of gas bills for December and January by A.F. Fergusons — the external auditors of the SNGPL — and a committee led by additional secretary of the petroleum division. While the reports were not made public, the government said the probes concluded 30pc overcharging to domestic consumers in the SNGPL system.

Published in Dawn, March 7th, 2019