Cut in UfG targets in Interior Sindh, B’stan: SSGC yet to share action plan with AGP

The Sui Southern Gas Company (SSGC) has yet to share the action plan with the Auditor General of Pakistan (AGP) on the reduction in the unaccounted for gas (UfG) targets in Interior Sindh and Balochistan.

The UfG losses at the overall company level remained at around 17 percent, which was beyond allowable UfG benchmark of 7.6 percent by the Ogra which resulted in a huge loss of Rs105.6 billion.

According to the audit, the gas company failed to achieve the UfG reduction targets set by the federal government relating to segmentation and rehabilitation for the last three years.

The management of the SSGC explained that the UfG in Karachi and interior Sindh has reduced from 14.9 percent to 11.4 per cent, whereas, UfG in Balochistan has increased from 49.8 per cent to 53.2 per cent. The matter has been taken up with Balochistan government to curtail gas theft culture by introducing a fixed tariff for domestic consumers. Besides, Karachi and interior Sindh rehabilitation schemes are ongoing to contain leakages issues of gas pipeline.

During audit of the SSGC for the financial year 2018-19, it was observed that as per Ogra’s decision on February 27, 2019, UfG losses were provisionally allowed at 6.3 per cent for the financial year 2018-19, whereas, the company UfG was recorded at 16.54 per cent amounting to Rs39.5 million during the financial year 2018-19.

Out of this, amount of Rs12 billion on account of UFG losses were allowed to the company for passing on to consumers, whereas, remaining UfG losses of Rs27.5 billion were borne by the company. Audit was of the view that the management failed to control the UfG losses despite incurring an expenditure of Rs2.3 billion in respect of rehabilitation, reinforcement, meter replacement and services replacement for UfG control-related activities for the financial years 2018-19, 2019-20, and 2020-21.

In 2018-19, the budget utilised to achieve the target of UfG reduction of Rs36.3 billion. In 2019-20, again Rs1.3 billion budget was utilised to reduce Rs36 billion UfG losses and 2020-21, Rs 735 million was utilised to reduce UfG of Rs33 billion.

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