Ogra raises UFG volume by 2.5pc adding more burden on consumers

ISLAMABAD: The Oil and Gas Regulatory Authority (Ogra) has passed the burden of amounting to mammoth Rs25 billion on to the legitimate end gas consumers by increasing the UFG (unaccounted for gas) volume in the gas tariff by 2.5 percent to 7 percent from existing 4.5 percent in its determinations about final revenue requirement of gas utilities Sui Southern Gas Company (SSGC) and Sui Northern Gas Pipeline Ltd. (SNGPL) for financial years 2012-13 and 2013-14.


The 2.5 percent growth in the UFG will expose the end gas consumers to further financial burden of Rs25 billion and to this effect the inflated bills the consumers will start receiving from January 1, 2016.

The Authority has finalised the determinations on November 5-6, 2015 about the final revenue requirement (FRR) of SSGC and SNGPL for both financial years 2012-13 and 2013-14 with the decision allowing the gas companies to charge one percent from the gas consumers for the failure in collecting the gas bills in the areas where law and order situation has deteriorated.

In addition, the Authority has also allowed the gas utilities to charge 1.5 percent more from the gas consumers in the head of non-gas consumers.

The non-gas consumers are those unscrupulous elements who are using the gas with no meters installed at their business houses or workplaces and the numbers of non-gas consumers are very large.

However, the determinations do not mention that the UFG has been increased, but at the same time they reveal that the Authority has allowed the gas utilities to increase by one percent the gas tariff in the head of non-recovery of gas bills because of law and order situation and 1.5 percent in the tariff in the wake of the gas being stolen by non-gas consumers.

Ogra Chairman Saeed Ahmad Khan confirmed that the Authority has allowed the gas utilities to charge end consumers for the losses the companies are facing because of deteriorating law and order situation in some areas of Baluchistan.

Federal Minister for Petroleum and Natural Resources Mr Shahid Khaqan Abbasi responded saying he has not yet seen the determinations with regard to final revenue requirements of gas utilities for 2012-13 and 2013-14 sent by Ogra.

However, the minister said that the issue pertaining to losses is now becoming irrelevant as the gas sale volume is being decreased owing to which the losses volume in percentage has alarmingly increased.

However, the officials at Ogra argued that the regulator has skillfully increased the UFG without naming it by two and half percent inflicting the colossal loss of Rs25 billion to the end gas consumers. The consumers will start getting the inflated gas bills from January 2016.

“The UFG for 2012-13 has increased from 4.5 percent to 6.75 percent and for 2013-14 it swelled to 7.25 percent from 4.5 percent. The Ogra has taken this painful decision for consumers without conducting any study about the lines losses of both the utilities.”