Rs52 billion theft of gas in Pakistan

load sheddingI was completely shocked at the audacity (to be precise shamelessness) of CEOs of gas distribution companies, Sui Northern Gas Pipeline Ltd (SNGPL) and Sui Southern Gas Company Ltd (SSGC) after reading proceeds of Public Accounts Committee (PAC).

The two very blatantly accepted that cumulative losses arising from unaccounted for gas (UFG) that include line gas pilferage, losses and leakages now hovered around Rs52 billion annually.

SNGPL’s Managing Director Uzma Adil Khan admitted such losses of the Company reached Rs22 billion while SSGC’s Managing Director Khalid Rehman told the committee that the losses in its franchised area (Sindh and Baluchistan) were estimated around Rs30 billion annually.

Interestingly both the CEOs attributed this massive pilferage to a ban on new connections and load shedding. It was also admitted that gas theft in some areas of Baluchistan has gone up to 50 percent.

While the PAC was of the opinion that the government had to take the political decision to contain attacks on gas pipeline in Baluchistan it failed in suggesting measures for containing theft.

OGRA Chairman Saeed Ahmad Khan said like line losses in electricity, there are line losses in gas which were passed on to the consumers. He told the Committee that the OGRA has fixed the limit of line losses at 5 percent but later on gas companies jacked up the line losses limit to 7 percent but the OGRA reduced it again on 5 percent and on this gas companies approached the Lahore High Court. He said the LHC has given the verdict in March 2013 in the favor of the Authority while vacating the stay order.

I have two submissions: 1) unlike electricity, pilferage of gas is almost impossible without the connivance of staff of gas distribution companies and 2) numbers provided by SNGPL are grossly understated, simply because it has a much bigger franchised area.

Both the federal and provincial governments have to support gas marketing companies in removing illegal connections and also in the recovery of overdue amounts. Amounts owed by state owned enterprises, federal and provincial government and semi-autonomous bodies can be recovered by making deduction at source.

 

 

  

 

 

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