LAHORE – The SNGPL wants increase in gas tariff by Rs 31.95 per MMBTU and UFG benchmark from 7 per cent to 9 per cent to cover billions of rupees per year losses in shape of gas theft and leakage.

A petition in this regard was filed by the Sui Northern Gas Pipelines Limited before the Orga, which held a public hearing on gas pricing on Thursday.

Unaccounted-for-gas (UFG) is a term which reflects gas theft and leakage in the system. The SNGPL is sustaining a loss of Rs20 billion every year on account of average 16 per cent UFG. The company, however, avoids making the percentage of the UFG losses public. The Ogra, in a bid to tighten the noose around the gas utility, is likely to further decrease the UFG level.

SNGPL DMD Amir Tufail said that SNGPL should be allowed to increase the UFG (Unaccounted for Gas) ratio because the company was facing losses. He also demanded of the Oil and Gas Regulatory Authority to allow issuance of demand notices on 400,000 applications for domestic connections.

The Ogra’s quota of 38,000 domestic connections for 2012 for Lahore has already met target and around one million applications for domestic connections are lying pending with the company.

“The SNGPL urgently needs funds to avoid the financial crisis. “The Ogra must consider the request of the company for allowing increase in gas prices,” held the legal council of the SNGPL. He said that fertilizer and industrial sectors were making huge profits by using cheap gas while their donor was facing loss.

The Ogra Chairman Saeed Ahmad Khan said that the authority would make decision on SNGPL’s request in light of the consumers’ interest. He urged upon the company to focus on the recovery from defaulters. To a question, he replied that provision of gas to domestic sector was the first priority of the government while the power sector was the second priority. He said the SNGPL must address the complaints of the domestic consumers about low pressure. On another query, the Ogra chairman termed the announcement of CNG association for closure of CNG pumps as illegal. He said the CNG prices were according to the notification issued by OAGRA on October 25. However, he held that OAGRA had called the CNG association for consultation on pricing on Friday (today) on the direction of the Supreme Court of Pakistan.

The Consumers Awareness and Welfare Association Chairman Engineer S T Hussain rejected the increase in prices by SNGPL and said that instead of increasing the prices SNGPL should focus on recovering amount from defaulters and curtail line losses.