3.4m gas consumers get inflated bills, PM told

ISLAMABAD: As many as 3.4 million consumers of Sui Northern Gas have received inflated gas bills on account of pressure factor 2 to 10 percent, out of which 200,000 consumers alone exposed to 10 percent pressure factor which is why they got excessive billing.

However, as many as 48,683 gas consumers falling in slab category 4 and 5, while just touching the next slab in the wake of pressure factor and 7-slab formula with 10-143 percent increase in gas price with no slab benefit, have been subjected to the excessive billing by 100-200 percent.

This has been disclosed in the meeting held with the prime minister on Tuesday in the chair by the fact finding committee for probe into the excessive gas billing. The committee headed by Additional Secretary Sher Afgan which was earlier notified on February 4 with members consisting DG Gas, DG LG, General Manager Billing (Sui Northern) but later on, it expanded with seven members comprising Additional Secretary Sher Afgan, DG Gas, DG LG, General Manager Billing (Sui Northern), General Manager Audit (SN), CFO Inter State Gas System and CFO Sui Northern is set to submit today (Wednesday) its report to the secretary petroleum which will forward it to the Cabinet Committee on Energy (CCOE).

The committee had the mandate to look into excessive billing in view of the increased gas price introduced by the government and must seek to findings about the reason and justification of the excessive domestic gas bills. The committee was also to look at the new slabs and suggest any rationalisation in view of the unprecedented increase in domestic gas bills. The committee was also to look into the billing mechanism, including observation of 30 days billing period, timely reading of the distribution of the bills to consumers in addition to other aspects of the billing system and procedure and suggest improvements.

According to the report of the fact finding committee, the Sui Northern has 6.4 million consumers out of which 3.8 million face the application of the pressure factor but out of them, 3.4 million sustained enhancement in the gas bills on account of pressure factor.

The Sui Northern carried out the sampling in 16 regions in two weeks’ time under which the 10,000 consumers gas meters were examined if they got inflated bills in the wake of pressure factor, the 3,000 (30%) consumers out of 10,000 have been identified that they fell victim to excessive billing just on account of pressure factor.

Prime Minister in the meeting held on Tuesday asked the authorities to keep on investigating based on sampling and credit the monetary compensation to the victims of inflated bills in next monthly billing in phases. In the meeting, it has been decided that Ogra will also carry out the exercise based on sampling under which 10,000 gas consumers will be checked just to cross check the sampling carried out of Sui Northern. After that this gas companies will keep on the checking gas meters if the pressure factor is justified or not and this will be ongoing exercise.

The official said that gas consumers use two types of gas meters; one is domestic meter whose cost is $15-20 and other is commercial cost of $30.

In the domestic meter, it is not possible to check the pressure factor with monometer on manual basis every month, so the pressure factor of 15 cubic meter was imposed on usage of 100 cubic meters causing more surge in gas bills. However, in commercial meter of wroth $30 has the capacity to read the gas price with pressure factor. So reading the commercial meters is very easy, but on domestic meter, the gas pressure factor is imposed equal to cost of 15 cubic meter on usage of 100 cubic meter gas. The official said that if pressure factor were not imposed, then volume of UFG (unaccounted for gas) would increase and the losses of the company would further increase. To a question, the official said that pressure factor is applied to the gas meters when the gas consumption increases beyond the 8 inch water column pressure.

In the meeting headed by Prime Minister Imran Khan, it was disclosed that Sui Northern imposed pressure factor in the gas bills since 2008 and Sui Southern since 2016. The pressure factor should be 0.0193 percent but it went up to 1.1 percent meaning by that pressure factor was illegally increased on some gas meters. Prime Minister took the cognizance on this issue and asked to fix those who are responsible. Managing Director of Sui Southern told the participants of the meeting that if pressure factor is not applied then it will be having the impact on unaccounted for gas by just 0.2 percent.

However, there is no decision taken in the meeting to limit the 7 slabs pricing formula to 5 slabs. The official said that the 7 slabs pricing formula with 10-143 percent will continue to take place with no slab benefit till June 30, 2019. The government will decide to review the gas prices keeping in view the revenue requirement of the gas companies and demand of IMF. The official said next budget will be prepared with consent of IMF. The IMF is currently exerting the pressure to erase the subsidy to the domestic sector.

Additional Secretary Sher Afgan, who is also chairman of the fact finding committee and is also spokesman of the Petroleum Division, confirmed to The News that 3.4 million got inflated gas bills on account of pressure factor and out of them, 48,683 gas consumers have been subjected to the excessive billing by 100-200 percent in the wake of pressure factor and 7-slab formula with 10-143 percent increase in gas price.

He explained that 35,824 gas consumers of 4 slab category when touched the figure of 301 cubic meter on account of increase in gas price and pressure factor fell into slab five category and their bill escalated from Rs275 per MMBTU to Rs780 per MMBTU, and they sustained the 200 percent escalation in their bills.

Likewise 12, 829 gas consumers of slab 5 category of gas price of Rs780 per MMBTU went into the slab 6 category of price of Rs1,460 per MMBTU, and they were subjected to the 100 percent increase in gas bills. Mr Afgan also confirmed saying that the decision about 7 slab gas pricing formula will continue with increase up to 143 percent in the gas price till June 2019 and the decision to review the slabs and gas price will be taken after knowing the revenue requirement of gas utilities for remaining months of the ongoing fiscal 2018-19 and next financial year 2019-20. He also said that new gas prices with new order of slabs will be notified from July 1, 2019.