ISLAMABAD - In an ominous development for the inflation-hit masses, the public gas utilities of the country have asked Ogra for a colossal hike in gas tariff.

The state owned gas utilities SNGPL and SSGCL have pleaded the regulatory authority to increase the gas tariff by Rs180/mmbtu and Rs108/mmbtu respectively for next financial year, sources in the gas companies said.

The Ogra (Oil and Gas Regulatory Authority) will soon hold public hearing on the petitions of SNGPL (Sui Northern Gas Company Limited) and SSGP (Sui Southern Gas Company Limited) to set the gas tariff for FY 2014-15.

Sources told The Nation that gas firms have asked for hefty tariff jack up citing global hike in gas price and increase in the expenditures of the both the gas companies.

Interestingly, the Ogra has repeatedly urged the ministry of petroleum and natural resources to set Unaccounted for Gas (UFG) benchmarks for both gas companies for the current and previous fiscal years but the ministry did not issue any policy guidelines to Ogra, which therefore remained unable to set UfG benchmark. As a result, the masses are already bearing heavy brunt of skyrocketing gas tariff for a long time.

The gas companies have been in litigation with Ogra, particularly with reference to the UFG benchmarks since FY 2009-10, which has created an unsolicited situation over the years. The matter is under active investigation by National Accountability Bureau as well as pending adjudication in Supreme Court and Sindh High Court. The final decision in this regard is remains pending.

Ogra in a letter dispatched to the petroleum ministry floated two options for consideration. First, the gas utilities may be granted a subsidy, instead of shifting the burden to consumers. Second, appropriate financial adjustments may be made with provinces adversely affected by instability. "Suitable policy guidelines may please be provided under Section 21 of the Ogra Ordinance, 2002 to address the issues with specific reference to FY 2012-13, decision of which is still pending, as well as for FY 2013-14," the Ogra letter said.

The UFG is the difference between the amount of gas purchased by a utility and the quantity of gas sold by it. The SNGPL and SSGCL have been seeking higher rates of UFG in view of rising gas losses due to pilferage and non-payment of bills etc, particularly in parts of the country hit by instability. And, formulation of UFG benchmarks had initially served to reduce the amount of gas losses of the SNGPL and SSGCL.

More, the two companies have so far been calling for revision of the UFG benchmarks and cited several reasons for the increase in gas losses, including the poor law and order situation in different areas, increase in gas price, increase in gas theft by non-consumers and the age of pipelines. However, the two companies couldn't sustain the efficiency drive and their gas losses began increasing after a few years, reaching 13.07pc in case of SNGPL and 8.96pc in case of SSGCL in 2012-13.