The government announces to reimburse the amount to consumers who received inflated bills due to application of gas pressure factor by end of June this year.

ISLAMABAD: Conceding collective responsibility over inflated billing, the government on Tuesday said it would restore slab benefits to ease financial burden on gas consumers in future.

“We accept this mistake. It was a collective decision of the Economic Coordination Committee (ECC) of the Cabinet to have done away with previous slab benefit to consumers,” said Minister for Petroleum and Natural Resources Ghulam Sarwar Khan.

In an informal engagement with journalists, the minister said the decision meant a consumer was charged at the same rate for entire consumption even if the few units of the highest slab were consumed. For example, the consumers were charged at the maximum rate when monthly consumption stood 510 units instead of charging 500 units at lower rate and incremental 10 units at maximum rate.

Mr Khan said the matter was discussed at length during the meeting of the federal cabinet on Tuesday that finally referred it to the ECC for a review. He said consumers suffered due the enhance gas rates and pressure factor during December, January and February. “We admit our mistake and would rectify it”, he said, adding ‘how it would be corrected’ would be decided by the ECC but as matter of principle consumers should be compensated.

He was however non-committal if the government would refund extra collections to consumers on this account, saying this would be discussed by the ECC because some legal issues were also involved because of formal notifications issued by the regulator on the advice of the government.

He said three separate investigations were ordered by the government into the matter including an internal inquiry, an audit by A. F. Ferguson and another by Prime Minister’s Inspection Commission.

He said the Fergusons had submitted the report that would be taken up by the cabinet committee on energy on Wednesday.

An official said A. F. Ferguson has concluded that 93 per cent gas consumers out of 3.2 million received inflated gas bills due to revision in gas slabs by the PTI government on Sui Northern Gas Pipelines Limited (SNGPL) system and remaining 7pc due to pressure factor. However, the government wants to reimburse the amount to the gas consumers who received inflated gas bills due to application of pressure factor.

As many as 3.2 million consumers had received inflated gas bills and 48,000 of them suffered due to higher pressure factor. The minister said the government would reimburse the amount to consumers who received inflated gas bills due to application of gas pressure factor by end June this year. However, the government has not yet taken a decision about the fate of remaining consumers.

Responding to question regarding demand of increase in gas prices by International Monetary Fund (IMF), the minister said that government would resist hiking gas prices to maximum level and pass on minimum burden to consumers.

About more LNG import from Qatar, he said the Gulf country had offered lower price for additional 200mmcfd compared to the existing price. Saudi Arabia had also offered LNG at even cheaper rates while Pakistan also had a memorandum of understanding with Malaysia for LNG trade, he said.

“We are under no compulsion and would go for the cheapest purchase and take a decision in the best national interest,” he stressed.

Talking about offshore drilling, the minister sidestepped questions about prime minister’s premature statements about a huge discovery but explained that drilling had reached 4,000 meters against a target reservoir of 5,500 meter and all should hope for ‘good news’.

He said the exploration companies had given a plan to invest $75 million for offshore. ExxonMobil had entered into an agreement when PML-N government was in place but it would not be fair to give previous government credit because the company had already investment plan based on prospects and data, he said. He said the PTI government facilitated by giving tax exemptions which would now be available to all exploration companies.

The PTI government had offered 10 blocks to exploration companies but no international company had participated, he said. Mr Khan further added that a summary had been sent to cabinet to appoint chairman and board of directors of SSGCL, PPL, OGDCL, SNGPL and PMDC which would be taken up in next meeting. Nomination of professional women had also been proposed on each board and provinces had also been given representation in upcoming boards.

He further said that government was also working on reducing gas losses and had given target of reducing 1pc UFG of gas companies on annual basis. He also ruled out that he was sidelined from the chairmanship of Cabinet Committee on Energy and had himself requested the prime minister to lead the body given serious crisis being faced by power and petroleum divisions.

He said that after a couple of meetings, the prime minister thought the responsibility should better be handled by the finance minister because of paucity of time.

He dispelled the notion that he was asked to resign due to gas crisis and inflated gas bills.

Published in Dawn, March 27th, 2019