ISLAMABAD
The Oil and Gas Regulatory Authority (OGRA) while setting the estimated revenue requirement of gas utilities has approved Rs 60 per Million British Thermal Unit increase in the gas price of SNGPL, while Rs 96/MMBTU in the tariff of SSGCL.
OGRA on Wednesday approved a hike in the tariff of gas utilities as a result, 16 per cent hike in the gas tariff for consumers has become inevitable. The authority has also reduced UfG ratio by one per cent and fixed at 6.3 per cent.
It is also learnt that gas utilities were facing financial shortfall due to maintaining the gas tariff artificially at same level during last three years by the government. At present, SNGPL has faced with Rs 27 billion shortfalls. And, the OGRA has set the UfG (Unaccounted for Gas) benchmark at 6.3 per cent for the year 2017-18, which will be collected from the consumers through gas tariff.
While finalising the estimated revenue requirement (ERR) of both the gas companies (SNGPL &SSGCL), the OGRA has finalised the UfG at 6.3 per cent, keeping in view the final draft of UFG study carried out by the independent consultants — KPMG hired by the OGRA. The regulator (OGRA) has included the said UFG volume in the estimated revenue requirements (ERR) of the gas utilities — Sui Southern and Sui Northern.
The OGRA has also granted approval to the gas companies to lay pipelines for 9,000 kilometres under new gas schemes and instructed the companies to initiate the schemes without any bias and avoid differences in the allocation of schemes to districts. Moreover, no bias for gas schemes of South Punjab and Khyber Pakhtunkhwa.
It is worth mentioning that OGRA has worked out the UfG, keeping in view 30-35 Key Performance Indicators (KPIs) and Key Monitoring Indicators (KMIs) which the gas utilities will have to fulfil in the whole year. The KPIs and KMIs have been worked out by the consultants — KPMG. The regulator has decided the estimated revenue requirement of both the gas companies that will be included in the gas tariff for the current financial year 2017-18. In the first year—2017-18, half of the 2.6 per cent allowance will be added on account of theft, leakage, non-gas consumers and law and order situation. This means that 1.3 per cent will be added in 4.5 per cent basic UFG benchmark and 0.5 per cent as transmission loss as the 7.6 per cent UFG has been linked with the tough key performance indicators (KPIs) and Key Monitoring Indicators (KMIs).
Earlier, the consultants — KPMG Taseer Hadi and Company, appointed by the Oil and Gas Regulatory Authority (Ogra), finally recommended the UFG of 7.6 per cent, which the gas consumers will pay for the next five years. The consultants worked out the actual UFG at 4.5 per cent, transmission loss at 0.5 per cent and loss on account of certain conditions such as non-gas consumers, law and order situation, theft, leakage, measurement errors, expansion of network on political grounds at 2.6 per cent. The 2.6 per cent allowance was linked with 30-35 tough targets. And, the gas companies will have to erase out the 7.6 per cent UFG after 5 years.
