ISLAMABAD  -   The gas consumers overcharged by the utility companies will be refunded Rs2.5 billion while the government is also planning to revisit the gas tariff slabs.

Giving a briefing to the Senate Standing Committee on petroleum here on Friday, Minister Ghulam Sarwar Khan revealed that as much as 50 percent (3.3 million consumers) of SNGPL (Sui Northern Gas Pipeline Limited) were sent excessive bills.

The petroleum ministry, PM inspection team and the international auditing firm –Ferguson - was investigating the issue, he told the meeting, chaired by Senator Mohsin Aziz.

The petroleum minister said that “pressure factor was one of the reasons behind the inflated bills”, adding that Ogra (Oil and Gas Regulatory Authority) had allowed less than two percent pressure factor.

He explained that many consumers facing low pressure in tail end areas used compressors to suck more gas but since the domestic gas meters were not made for such use, they failed to absorb such pressure and stopped recording quantity of gas consumption.

Sarwar said the ministry had submitted its initial report to the PM on which he has ordered to readjust the amounts of such consumers who were charged with high pressure factor in their next bills. It is also under investigation that who allowed the billing with high pressure factor so as to take action against them, he added.

SNGPL Acting MD told the committee that three inquiries have been marked under which Ferguson is extensively auditing the utility company and the auditing firm has given it initial findings. He said that Ferguson and the petroleum ministry would submit their final reports to the PM by March 22. So far, Rs50 million have been reimbursed to 11,200 consumers, the MD added.

Faulty slabs system

The petroleum minister said that gas slabs system was started in 2012 while pressure factor is being applied since 2008. In next few months, the government would refund around Rs2.5 billion to the consumers, he added.

He said that “seven slabs were introduced and we accept the responsibility that the technical mistake has been committed in it. We would revisit it and bring new slabs.”

He said that costly gas was procured and supplied to consumers at subsidised rates for political gains that pushed up the losses of gas companies (SSGC and SNGPL) to Rs154 billion in last five years.

Every year, the UFG (unaccounted for gas) was increased while one percent point increase in UFG translates into Rs2 billion for each company, he said. Every year, around Rs50 billion of UFG was accumulated, Sarwar told the committee.

The minister said that in the first four years of the previous government, the new gasification projects were banned but in its final year, the PML-N government approved gas schemes of Rs55 billion.

Balochistan problem

On complaints of low gas pressure in Balochistan, SSGC acting MD Muhammad Wasim said that the company was ensuring uninterrupted gas supply and adequate pressures to Quetta, Kalat, Mastung and Ziarat.

This winter in January, 7.156 billion cubic feet (BCF) of gas was supplied to the Balochistan against 5.379 BCF in same month of last year, which shows and an increase of 1.77 BCF; besides, new compressors were added and made modification in pipelines, he said.

But against this supply, the recovery was very low with huge Unaccounted For Gas (UFG) occurring because of gas theft and leakages. The UFG in Balochistan was as high as 72 percent (or 5.133 BCF), the MD regretted.

Senator Mir Kabir Ahmed Muhammad Shahi, who raised the issue, admitted that there was some improvement in gas pressure in major towns of Balochistan, but he insisted that some areas are still facing actually low gas pressure.

He also complained of excessive gas bills, claiming that even homes as small as having two rooms had been issued up to Rs200,000 bill. The unrealistic bills would definitely compel the consumer not to pay bills, he argued.

Senator Dr Jehanzeb Jamaldini said that due to low gas availability, people were cutting precious Sanober and Juniper trees to keep their children warm in chilly areas of Kalat and Ziarat.

He said that it was unacceptable that while gas was being supplied to even industries in other provinces, the domestic consumers in gas producing Balochistan were not getting enough supply.

Petroleum Minister Ghulam Sarwar Khan said that UFG of the SNGPL was 11pc while in case of SSGC it was 13pc.

He said that Balochistan was primarily responsible for the higher losses of SSGC as the UFG in the province was unacceptably high – 72pc.

The UFG is even higher (90 pc) for the areas of Balochistan that were complaining of low gas pressure, and those areas were supplied 33pc more gas this winter, he said. Of 230 mmcfd gas provided to Balochistan, charges are recovered against only 50 mmcfd of gas, the minister said. Therefore, the centre and other provinces want resolution this issue.

The government is considering to charge the gas consumers with flat rates and take up this with the Economic Coordination Committee (ECC) of the cabinet and then in the federal cabinet and also move a resolution in the National Assembly while keeping in view the recommendations of the opposition.

SSGCL official said that they have acquired land for 10 LPG air mix plants in Balochistan and taken approval from the board. This month they are going to start work on four plants and by end of this year, 10 plants would be installed, he added.

Other issues

Chairman Mohsin Aziz asked that why there is moratorium on industrial gas connections in other three provinces and Punjab has been exempted. The director general (gas) said that Punjab industrial sector is provided RLNG, therefore it has been exempted.

The committee strongly recommended lifting of moratorium for all provinces, in line with a resolution passed by the Senate.

Regarding Gas Infrastructure Development Cess (GIDC), the minister said that as the government has settled sown this issue with the fertiliser sector, IPPs/GENCOs/K-Electric and general industry including its captive power plants would be provided 50 percent waiver in GIDC payables for the period from Jan 1, 2012 to Dec 31, 2018. Total GIDC is of Rs416 billion, he shared.

“We would try to give this waiver on the lines of CNG sector which has been given the waiver and allowed to pay in two instalments. The GIDC issue will be taken to the Cabinet Committee for Disposal of Legislative Cases (CCLC) and then ratified by the cabinet,” Sarwar said.