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SNGPL pleads increase in tariff

April 04, 2013

LAHORE, April 3: If the Sui Northern Gas Pipeline Limited is not allowed to increase price and the benchmark of the Unaccounted for Gas, a euphemism for theft and line losses, the company will have to bear Rs8 billion per year, says Managing Director Arif Hameed.

Talking to reporters at the hearing of the company’s petition for increase in both, he said SNGPL wanted an increase in gas tariff by Rs53.83 per MMBTU from July 1 and UFG benchmark from 4.5 per cent to 7 per cent to cover billions of rupees losses every year.

A petition to the effect was filed by the SNGPL with Ogra, which held a public hearing on gas pricing on Wednesday.

According to Hameed, the company is sustaining a loss of billions every year on account of 10 per cent UFG. If it is allowed to raise the price, there will be an increase of only Rs7 in domestic bill but will benefit the company hugely.

The MD said owing to sabotage at Zamzama field recently, the shortfall increased by 250mmcfd. It was on the top of 550mmcfd that the company was already facing. About ever-increasing network of the company despite rising deficit, he said expansion was sanctioned by the government and Oil and gas Regulatory Authority.

On the occasion, Ogra Chairman Saeed Ahmad Khan claimed that his authority would take a decision keeping in view benefits for both the company and consumers. “If the company is allowed to raise price, there will be Rs2 to Rs5 increase in bill for domestic consumers. The company losses have increased due to expansion in network for political reasons. In the past, 70 per cent of expansion cost was borne by the government and 30 per cent by the company. That is exactly opposite now. The company needs to improve recovery of dues. The recovery issue is a terminal problem and process is very slow.”

SNGPL Board of Directors member Mirza Mahmood Ahmad said: “The company urgently needs funds to avoid the financial crisis. The Ogra must consider the request of the company for allowing increase in gas prices and UFG benchmark.” — Staff Reporter