ISLAMABAD: The Oil & Gas Regulatory Authority (Ogra) on Thursday allowed Rs44 per unit (5.4 per cent) increase in the prescribed price for Karachi-based Sui Southern Gas Company (SSGC).

The increase was determined on the request of the utility on the basis of its estimated revenue requirement (ERR) for financial year 2020-21. The regulator said the company will be able to meet Rs14.3 billion shortfall in its ERR, including prior year shortfall of Rs51bn. The new prescribed price has been worked out at Rs779 per Million British Thermal Unit (MMBTU) from the existing rate of Rs636 per MMBTU.

Ogra has also allowed the utility to double its gas meter rent from Rs20 per month to Rs40 per month for domestic consumers. In its determination, Ogra recommended to the government to fix Rs779 per unit rate for all consumer categories so that all consumers pay at least the cost of gas supply.

Under the law, the government has the right to set within 40 days different rates for various consumers within the overall revenue requirement approved by the regulator. Ogra said that if the federal government failed to get back

to it with its advice within 40 days and the prescribed price for any category of retail consumers determined by the authority is higher than the most recently notified sale price for that category of retail consumers, the authority would be obligated to notify in the official gazette the prescribed price as determined by the authority to be the sale price for the said category.

The regulator suggested that the petitioner should focus and make concerted efforts on reduction of UFG, improvement of internal control systems, increase of efficiency, quality of service, emergency response plan, and effective cost control, reduction measures should be taken to remain financially viable instead of making all-out efforts to seek passing on of costs associated with its own inefficiencies, malpractices, thefts, bad debts and alike to consumers.

Ogra said the SSGCL had reported that revised estimated revenue requirement (RERR) for the said year was reflecting a surplus of Rs22.745bn. However, after inclusion of Rs50.98bn, being unadjusted shortfall for prior years up to FY2017-18, the revenue shortfall stood at Rs28.242bn that required Rs78.95 per MMBTU increase for indigenous gas business.

However, examination of record and arguments of the interveners, the regulator allowed an increase of Rs44 per unit or 5.4pc increase in prescribed price for SSGCL.

Published in Dawn, January 29th, 2021