ISLAMABAD, Nov 1: In an unusual financial review, the Oil and Gas Regulatory Authority has ordered reduction in average gas tariff by 14 per cent and 10 per cent for the consumers of the Sui northern and Sui southern gas companies, respectively, with retrospective effect from July.
The government is, however, reluctant in notifying the revised gas rates to earn a windfall gain of over Rs24 billion in the form of gas development surcharge.
The government is required under the Ogra ordinance to notify revised tariff on or before November 7. However, it is likely to take advantage of another clause in the ordinance to retain Rs24.272 billion during the current fiscal year, a senior official at the ministry of petroleum says.
Official documents available with Dawn suggest that Ogra reopened financial accounts of the two gas utilities and, after examination of each and every source of their income, concluded in last week of September that the companies had been allowed much higher rates than their revenue requirements.
Interestingly, the reduction in tariff determined by Ogra if notified by the government will reduce the operating income of the SNGPL and the SSGCL by more than Rs16.203 billion and Rs8.069 billion, respectively. This would, however, not benefit the consumers but yield over Rs24 billion additional revenue to the government.
In its determination on the gas rates of the SNGPL, Ogra found out that the revised estimates of the company’s net operating income was Rs147.343 billion as against its revenue requirement of Rs131.140 billion for financial year 2006-07. As such to adjust the difference of Rs16.203 billion, Ogra made a downward revision of Rs26.20 per MBTU (million British thermal unit) in the SNGPL’s average prescribed price for the current year.
Ogra in its latest order said: “Decrease in the prescribed prices has been made at 13.64 per cent in each category of consumers, except for domestic category, Liberty Power Project and old fertilizer plants.”
Ogra has ordered that the gas tariff for commercial consumers and ice factories be reduced by Rs40.45 per MBTU, followed by Rs35.95 per MBTU for industrial consumers, captive power plants, Wapda s power plants and CNG stations.
In the case of the SSGCL, Ogra determined that revised estimate of the company’s net operating income was at Rs87.712 billion as against revenue requirement of Rs79.643 billion. To adjust the difference of Rs8.069 billion, the authority made downward revision of Rs22.37 per MBTU in its average prescribed price for 2006-07.
In its final order, Ogra said: “Decrease in the prescribed prices has been made at 9.86 per cent in each category of consumers, except fertilizer plants, which is governed by a separate policy.”