ISLAMABAD, Aug 9: The Consumer Rights Commission of Pakistan (CRCP) has voiced its concerns over the Oil and Gas Regulatory Authority’s (OGRA) decision to allow Sui Northern Gas Pipelines Limited (SNGPL) to increase gas tariff by Rs7.13 per mcft.

The commission has approached the president secretariat to stop any increase in consumer price which the federal government is entitled to do under Section 8, sub-section (1) and (3) of the OGRA Ordinance.

While reflecting on the impact of increase in gas tariff, the CRCP secretary-general, Mian Abrar Hafeez, said: “The current increase of Rs7.13 per mcft has a retrospective effect from July 1, 2002 and will be adjusted from GDS for the fiscal year 2001- 2002. Therefore, the resulting amount payable to the company will not be met through an increase in the consumers end price.”

However, he said: “The government could increase the sale price next year to adjust the loss accrued due to the recent tariff increase.”

He said the CRCP had pleaded against the SNGPL petition for increase in gas tariff on several counts. Unaccounted for Gas (UFG) of the SNGPL — line losses — remains to be on the very high side. Line losses are 8.13 per cent as on March 2002. Whereas, international standards for UFG are four to six per cent. It is important to note here that one per cent line losses account for Rs415.73 million.

Moreover, the increase in the maintenance expenditure has been substantial, notwithstanding the parameters of efficiency. Maintenance charges for 2000-01 were Rs188 million, which increased to Rs302 million in 2001-02. The SNGPL had to recover Rs1,700 million in 2001-02.

The SNGPL had written off more than Rs251.128 million in 2000-01 as bad debts. “Now that the authority has allowed an increase in prescribed price, it should not affect the quantum of sale price,” Mr Hafeez maintained.

He said according to Section 8, sub-section (1) and (3) of the OGRA Ordinance No. XVII of 2002, the OGRA could only suggest the federal government the prescribed price of natural gas for each category of retail consumer. The federal government determines the sale price, which is essentially higher than prescribed price, determined by the OGRA. The GDS amounts to the difference between sale price and prescribed price. Now the impact of increase in gas tariff was stringed to the determination of sale price by the government.

Mr Hafeez stressed that the government should realize the miseries of people who were burdened with exorbitant utility charges. He said the government should use alternative sources to sustain its loss. It should not increase gas sale price in the next year, as it will, in particular, increase the burden on poor consumers, he added.