Inflated gas bills Rs2.5b to be reimbursed to consumers soon

ISLAMABAD: The government would reimburse around 2.5 billion rupees to gas consumers who have been charged with higher rates because of faulty gas tariff slabs and undue ‘pressure factor’. The inquiry committee of the Ministry of Petroleum and an international Audit firm Ferguson would was hired for auditing the inflated gas bills issue would submit their final reports to Prime Minister on 22 March 2019.

Seven slabs were introduced and “We accept the responsibility that the technical mistake has been committed in it [slabs] and would revisit it and would bring new slabs. Pressure factor was also one of the reasons that inflated bills were been issued. “I admit the excessive bills have been issued to consumers,” Minister for Petroleum and Natural Resources Ghulam Sarwar Khan said this while briefing the senate standing committee on petroleum here Friday that met here with Senator Mohsin Aziz in the chair.

Minister further said that Ogra had allowed less than 2pc pressure factor, but some consumers were charged on the bases of more than this threshold. In tail end areas, due to low pressure, the consumers used compressors to suck more gas, but as the domestic gas meters were not made for such use, so it could not absorb such pressure and stopped recording quantity of gas consumption. Mostly, 50 percent (3.3 million consumers) have been sent excessive bills on the SNGPL system that has total 6.4 million consumers.

He said that the Ministry of petroleum, PM inspection team and the international auditing firm ‘Ferguson’ is also investigating it as to reach the reasons and responsible for inflated bills. The Ministry has probed and submitted the initial report to the PM on which he had ordered to readjust the amount in their bills who have been charged with high pressure factor. It is also under investigation to pinpoint the responsible for allowing bills at high pressure factor, as to take action against them.

Ferguson and the Ministry of petroleum would submit their final reports to the PM by 22 March 2019. In next few months, the government would refund around Rs2.5 billion to the consumers, minister said.

Acting MD SNGPL said that three inquiries have been marked, in which the Ferguson is extensively auditing it and has also given it initial findings, but is further investigating it. So far, Rs50 million have been reimbursed to 11200 consumers. He said that since 2012, gas slabs are under implementation while pressure factor is applicable since 2008.

While criticizing the previous governments, Minister said that costly domestic gas was been procured, while it was supplied to consumers at subsidized rates for ‘political gains’ that ballooned the losses of gas companies (SSGC and SNGPL) to Rs154 billion in last five years. Every year, the UFG was increased. One percentage point increase in UFG indicates Rs2 billion increases in UFG for each company. Every year, around 50 billion of UFG was accumulated.

Minister also said that in the first four years of the previous government, the new gasification project were banned but in its final year in 2018 which was election year, the PML-N government approved gas schemes of Rs55 billion and the members of this party admit off the record that in Punjab they have got around 30 seats. He said that for political gains, they did not care for the companies and their financial health.

GIDC issue with fertilizer/IPPs/GENCOS/KE

Regarding Gas Infrastructure Development Cess (GIDC), minister said that as the government has settled down the issue of the GIDC with the fertilizer sector, IPPs/GENCOs/K-Electric and general industry including its captive power plants would be provided 50 percent waiver in GIDC payables for the period 1 Jan 2012 to 31 Dec 2018. Total GIDC is of Rs416 billion. We would try to give this waiver on the lines of CNG sector which has been given the waiver and allowed it in pay in two installments. The GIDC issue will be taken to Cabinet Committee for Disposal of Legislative Cases (CCLC) and then will be ratified by the Cabinet.

While appreciating the step and bringing the country and companies out of litigations, chairman of the committee Senator Mohsin Aziz asked the Minister and other officials to increase the installments to at least five. On which the minister said that we can discuss it.

Moratorium on Industrial Gas Connections

Mohsin Aziz asked that why there is moratorium on industrial gas connections in three provinces, while Punjab has been exempted, DG gas said as Punjab industrial sector is provided RLNG, so it is exempted.

The committee strongly recommended that that moratorium be removed for Sindh, Balochistan and Khyber Pakhtunkhwa as passed in a resolution by the Senate of Pakistan.

SSGCL official said that we have acquired land for 10 LPG air mix plants in Balochistan and have taken approval from the board. This month we are going to start work on four plants and by end this year total 10 plants would be installed.

Low gas pressure in Kalat and Mastung and Ziarat and cutting of precious trees

On the complaint of senators from Balochistan regarding low gas pressure in Kallat, Mastung and Ziarat in Balochistan, acting MD SSGC Mohammad Wasim said that the company was ensuring un-interrupted gas supply and adequate pressures to Quetta, Kalat, Mastung and Ziarat. This winter in January, 7.156 billion cubic feet (BCF) of gas was supplied to the Balochistan against 5.379 BCF in same month of last year with an increase of 1.77 BCF, besides new compressors were added and made modification in pipelines. But, unfortunately, of this total supply, the recovery was very low with unaccounted for gas (UFG)—or gas theft and leakages—was huge 72 percent (or 5.133 BCF) increased by 3 percentage points over same month last year when the figure of UFG was 3.668 BCF in January 2018.

Senator Mir Kabir Ahmed Muhammad Shahi however admitted that a little bit improvement has been seen in gas pressure, but still some areas are very much severely facing the problem which needs to be addressed. He also complained of excessive gas bills saying that even homes with two-room have been issued the bills of up to Rs200,000, then how come the company could get better recovery. The unrealistic bills would definitely compel the consumer to not pay bills.

Senator Dr. Jehanzeb Jamaldini said that due to low gas availability, people are being cutting the precious Sanober and Juniper trees to keep their children warm in minus temperature in the areas of Kalat and Ziarat.

Earlier, there projects of Japanese government to preserves these trees were also executed, but now the within no time they are cutting trees having ages up to thousands of years. It is unacceptable that the natural gas in being supplied to the other provinces for domestic consumers and industrial sector, but the local is being kept deprived.

Another senior official of the SSGC said that 230 million cubic feet/day (mmcfd), of which 3 mmcfd of gas is being supplied to 19 CNG stations and six other factories in the province.

Minister for Petroleum and Natural Resources Ghulam Sarwar Khan said that UFG of the SNGPL is 11 pc while SSGC has 13pc. Only in Balochistan the UFG is huge 72pc and the areas which complaining of low gas pressure, the UFG is 90 pc where 33pc more gas was supplied in winters.

Of 230 mmcfd gas to Balochistan, only 50 mmcfd of gas charges are recovered. For this purpose, the center with the provincial government and its senators and MPs we want to resolve this issue. The government is considering to charge the gas consumers with flat rates and take up this with the Economic Coordination Committee (ECC) of the cabinet and then in the Federal Cabinet and also move a resolution in the National Assembly while keeping in view the recommendations of the opposition.