Islamabad - The stakeholders have called for the execution of equitable tariff regime for the transportation of RLNG through pipelines of the gas utility for the public and private companies.
The demand was made by the stakeholders during a hearing conducted by Oil and Gas Regulatory Authority (Ogra) on the application of SNGPL for the determination of transportation and distribution tariff for the shipper for Fiscal 20-21. However, interveners from the private sector raised serious questions over the heads of transportation and distribution tariff in a petition filed by Sui Northern Gas Pipeline Limited (SNGPL).
The government-owned companies were lifting 1200 mmcfd LNG. The private sector said that the new transportation tariff regime should also be applicable across the board and the private sector should not be burdened by charging different transportation tariff. They also questioned the imposition of penalty, capacity payment, and application of tariff for all companies from the public sector as well. The stakeholders were of the view that gas utility companies wanted to charge capacity payment and tariff as well even if it denies pipeline capacity for any reason. Why the private sector should pay the tariff to the gas utility which bars them to use pipeline capacity in any case, said the intervener. UGDC Chief Executive Officer Ghayas Paracha lamented for blocking imports by the private sector. He said UGDC had been struggling for four years to import gas but hurdles were created and therefore efforts could not yield results. Several foreign companies were willing to work in the LNG sector in Pakistan, he said. Tariff of transportation of imported gas should be on an equitable basis for both private and public sector companies as well, Paracha added. He said that gas utility had demanded to charge insurance fee from a third party and questioned the benefits associated with the insurance.
Secondly, he opposed the legal professional charges claimed by SNGPL to charge from the third party. He feared the gas utility would use the funds collected from the third party against them in legal disputes and requested the removal of this head from the tariff. He also drew attention towards the retaining charges gas utility claimed in transportation tariff. He said that they had no experience of such example in the world as LNG terminal operators were already receiving retaining charges. Paracha also requested the regulator to issue a final decision instead of provisional decision regarding transportation tariff. It would be difficult for a third party to recover dues from the consumers if there is a change in a decision later, he argued. He requested Ogra to allow equitable tariff regime for all including the public sector as well. He said that the private sector would not be able to import LNG due to high tariff regime. Paracha urged to facilitate the private sector to import cheaper LNG in a bid to facilitate the consumers.
Shahid Sattar representing All Pakistan Textile Mills Association (APTAMA) also backed a call of giving a final decision on transportation tariff rather than a provisional one. He said that it would also be difficult for the textile sector to recover dues on products after they are exported. He said that the textile industry was also interested in the import of LNG as it required 350 mmcfd gas to meet the requirement. Therefore, he said that the private sector should also be facilitated to import cheaper.
Saqib Aziz representing Fatima Fertilizer also raised question over the tariff claimed by the gas utility. He said that the market should be open to the private sector. Arsalan Ahmed representing JS Global said that the current mechanism of transportation proposed by gas utility would make it difficult for the private sector to import gas. If there is a difference in transportation tariff, then the government should have to give subsidy. He said that the industry should be auditable. SNGPL managing director Amer Tufail said that it was a historic day that third party model of open access was being introduced. He said that SNGPL had requested to allow charge the tariff for use of the capacity pipeline.
SNGPL official Mr Kamran pleaded the case and said that they had requested a tariff to transport gas from the pipeline network. He said that they had demanded cost which the company requested Ogra to allow in review motion. He said that there should be a decision in neutral market price. He said that retainage would be actualized by end of the year. Therefore, this issue would be resolved. He expressed the fear that SNGPL consumers would be shifted to the third parties due to uniform transportation tariff. He said that SNGPL was operating on ring-fenced regime based on the supply of indigenous and imported gas. Shifting of consumers to the third party would result in lowering throughputs leading to the higher tariff of gas for the consumers, he added.