Penalising honest gas consumers
Stepping into the shoes of NEPRA, in a controversial move Oil and Gas Regulatory Authority (OGRA) has allowed the state run gas utility—Sui Northern Gas Pipelines Limited—to recover billion of rupees, which are outstanding against gas stealers and bills defaulters, from the honest consumers on account of gas theft during the last five years with retrospective effect. This decision is the negation of social justice and slap in the face of virtue of honesty. It will further encourage gas theft and the issue will snow ball with the passage of time.
Earlier OGRA had disallowed the gas utility to recover the losses of gas theft from honest consumers who regularly pay their monthly bills before the due date. However, in the review motion the regulator has allowed the gas company to recover additional 2.6 percent unaccounted for gas (UFG) for the period 2012-17. It implies that the massive gas theft started in the previous government of Pakistan People’s Party (PPP) by the political and business elite like the electricity theft and default of monthly bills. It establishes the fact that either gas theft was non-existent or minimal in Musharraf era.
The regulator during the last PPP government had allowed 7 percent UFG to gas companies whipping up a sharp controversy. And now it has allowed 2.6 percent UFG to the gas utility.
The Auditor General of Pakistan had termed the appointment of current OGRA chairman Uzma Adil—who was also former employee of SNGPL– as illegal, saying she had been favouring her parent gas company in her decisions at the expense of honest domestic, commercial and industrial consumers. In the new decision the gas company has once again been favoured, ignoring the political repercussions for the PTI government. The consumers are already complaining against the recent gas tariff hike of 143 percent and are unhappy with the government because of its impact on the poor and middle class people.
In a statement OGRA said the authority with majority approved in principle that variable allowance of up to 2.6 percent on account of claim and allowed by regulator should be staggered in the proceeding five years to be recovered from the consumers so as not to burden them in one go. It also allowed the Sui Southern Gas Company (SSGC) to recover Rs. 779 million on account of late payment surcharge from consumers. However OGRA member finance Noor UL Haq wrote a dissenting note on this decision which raveled the sagacity and impeccable integrity and consumers’ friendly attitude of this officer.
Such like insane decisions has always been counterproductive as it increases the level of theft and default by the dishonest consumers of public utility services. This recipe of doom was suggested by a former secretary finance to a former finance minister Ishaq Dar to shift the burden of power theft to honest consumer to address the issue of circular debt. It did not work as power as steep rise in power theft was recorded, the amount of default by the influential consumers has reached to Rs. 860 billion and power sector circular debt has swelled to Rs. 1.18 trillion. The International Monetary Fund has asked the government to bring a reduction of Rs. 30 billion per month in the circular debt. The World Bank has cautioned against further increase in power tariff and advised to ensure efficiency in the power distribution system and revenue recovery mechanism.
The business leaders have repeatedly voiced their concern against the sky-high tariff of energy inputs because it pints up inflation, vitiate the economic environment and wipes out the comparative advantage of export products in the international market. The focus should be on removing the inefficiencies in the gas utilities, crack down on influential industrial, commercial and domestic gas stealers. There is a free for all in the usage of gas without installing meters in gas producing districts of Khyber Pukhtunkhwa. In the district of Karak alone there is annual gas theft of Rs. 10 billion. Such like loopholes need to be plugged instead of penalizing the honest gas consumers.