The government has decided to carry out the performance and efficiency audit of the two state owned Sui gas companies, to check out the veracity of their claims of losses, an official source revealed on Thursday.
The official said that the Prime Minister’s Office had issued directives to the Ministry of Petroleum to order the performance and efficiency audit of the Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC).
The directive came after the revenue petitions filed by SNGPL and SSGC for the current fiscal year with the Oil and Gas Regulatory Authority (OGRA) demanded an unaccounted for gas (UFG) level of 11.5 per cent and 15 per cent respectively.
One per cent of UFG is roughly equal to Rs 1.8 billion which means that SNGPL has annual gas losses of over Rs 20.7 billion while SSGC loses Rs 27 billion every year. Both companies claim that UFG has increased due to lawlessness in Khyber Pakhtunkhwa (KP), Sindh and Balochistan. Their argument is that consumers there don’t pay their bills and gas theft is common.
OGRA has fixed the UFG benchmark at 4.5 per cent. It disallows charging of gas losses above the UFG level from the consumers. The companies want that the remaining portion of UFG should be paid to them from the gas infrastructure development cess as otherwise the companies will default.
There is skepticism in the government circles about the UFG claims of Sui companies. They are of the opinion that the law and order situation is not as bad as claimed by the companies and they might be making these claims to hide their own inefficiency and corrupt practices, the source said.
The companies claim that the increase in UFG has primarily arisen from factors beyond their control like the shift of gas from bulk to retail sectors which increased from 45 per cent in 2003/04 to 78 per cent in 2013/14.
The UFG for power and fertilizer sector is below 1 per cent but it is massive for CNG in both commercial and domestic markets. Gas officials point to areas with bad law and order situation, particularly Gurguri Kohat where gas losses increased from 2bcf in 2011/12 to over 11bcf in 2013/14.
