AHMAD AHMADANI

ISLAMABAD - Due to the wrong step of the government, the gas companies have managed to put Rs 26 billion burden on the poor masses on account various non-operating income heads.

Sources privy to the development informed TheNation that Ogra has written a letter to Petroleum Ministry requesting the PPP-led coalition government to revisit its stance and take necessary actions to vacate the high court’s Stay Order granted against Ogra regarding declaring of various sources of incomes of gas companies as non operating incomes instead of operating incomes in the better interest of hard pressed consumers as soaring monstrous increases in gas prices have added to the miseries of general public and created hue and cry in the country.

Available letter no OGRA-103 (6) 2010/LHC, dated January 04, 2012 of Ogra with a subject interim relief granted by honourable Courts against OGRA’s determination of estimated revenue requirement for FY 2010-11& 2011-12 has disclosed that interim relief was granted by honourable courts against OGRA’s determination of Sui Southern Gas Companies Limited (SSGCL) and Sui Northern Gas Companies Limited (SNGPL) for review of estimated revenue requirement (RERR) for FY 2010-11 dated December 02, 2010 and estimated revenue requirement (ERR) for FY 2011-12 dated May 24, 2011.

It was learnt from Ogra’s letter that former Secretary for Petroleum and Natural Resources Imtiaz Qazi, in Lahore High Court on December 02, 2010, had not supported Ogra’s stance regarding 2.5 per cent unaccounted for gas passed on to the consumers and earning of gas companies from different sources including late payment surcharge, meter-manufacturing plants, sale of gas condensate and royalty from Jamshoro Joint Venture Limited (JJVL) as operating income and fixing UFG (unaccounted for gas) targets per Ogra’s prescribed benchmark in the revenue requirement for financial year (FY) 2010-11.

It is to be noted here that Imtiaz Qazi, incumbent Secretary for Water and Power, in his statement had said that by declaring different sources of earnings of gas companies including putting 2.5 percent UFG on consumers and earning of gas companies (SSGCL & SNGPL) including late payment surcharge, meter-manufacturing plants, sale of gas condensate and royalty from Jamshoro Joint Venture Limited (JJVL) as non operating income instead of operating income there would be no extra burden on the consumers.

However, contrary to the position of then Secretary Petroleum, Ogra had already declared the earning of gas companies generated through late payment surcharge, meter-manufacturing plants, sale of gas condensate and royalty from Jamshoro Joint Venture Limited (JJVL) as operating income.

According to sources in Ogra, with accordance to international business rules, earning from above said sources come under operating income and even if it is declared non operating income then hefty amount worth in billions will go in the pockets of companies’ shareholders. So in a bid to satisfy the expenditures of gas companies prices of gas will have to be made more expansive.

Sources have further informed that due to declaring the income of gas companies from above said sources as non-operating income, shareholders have earned a heavy profit of Rs20 billion.

Furthermore, with accordance to Ogra’s letter, SNGPL had faced a loss of Rs12 billion, thus had caused bad impact on gas infrastructure and development work. “ In case of SNGPL, Rs 12 billion of gas development surcharge has been eroded in FY 2011-12 alone”, Ogra letter reads.

It is testimony of the fact that after the statement of Imtiaz Qazi, honourable courts, while awarding stay order in this regard, also declared a 7 percent UFG for gas companies for FY 2010-11 and 2011-12 coupled with the income of gas companies generated with late payment surcharge, meter-manufacturing plants, sale of gas condensate and royalty from JJVL as non operating income instead of operating income.

Ogra’s letter further disclosed that an extra burden to the tune of Rs 26 billion had been passed on to the consumers in FY 2010-11 & FY 2011-12. As a consequence, beleaguered federal government announced price increase of 13.55 percent w.e.f August 07, 2011. Recently, Petroleum Ministry increased sale price for various categories of consumers in the range of 13.98 percent to 207 percent effective January 01, 2012. Resultantly, the cash starved government had to jack up gas prices by 27.50 per cent and put salt on the injuries of gas consumers. “These whopping increases have added to the miseries of general public and created hue and cry in the society”, authority’s letter says.

Through its letter, Ogra has also pleaded to the government to review its decision in the larger interest of general public and necessary initiatives to give an end to the series of exploitations being done with the over burdened gas consumers. 

“In view of above, federal government is requested to revisit its stance in the larger public interest and take necessary actions to vacate the high court’s Stay Order granted against Ogra’s above referred decision”, Ogra’s letter reads.