ISLAMABAD: On the consumers’ complaints, the Oil & Gas Regulatory Authority (Ogra) has decided to investigate the overcharging of liquefied petroleum gas (LPG) by the state-run Sui Northern Gas Pipelines Ltd (SNGPL).
An Islamabad-based non-profit organisation — Consumer Rights Advocacy (CRA) — had reported to the Ogra chairman last week that SNGPL was overcharging consumers on the supply of LPG.
The product is considered a poor man’s fuel, mostly used in rural and hilly areas that are generally away from urban centres and natural gas networks, but is almost five times pricier than natural gas or more than double even the liquefied natural gas (LNG).
It alleged that Ogra had notified on Dec 31, 2024, the LPG price for an 11.8-kg cylinder as Rs2,953.36 for January, but the SNGPL was selling the said cylinder for Rs3,253 “right under the nose of the regulator and the federal government within the premises of SNGPL itself in the federal capital — Islamabad city.
The complaint also contained payment receipts issued by SNGPL in the first week of January. “Overcharging of Rs299.64 per 11.8 kg cylinder above the maximum notified price is a clear violation of the law and blatant evidence of daylight robbery”, wrote CRA’s President Muhammad Arif, who previously served as an Ogra member.
“When there are such glaring examples within public sector entities, how can Ogra expect the private sector to comply?” questioned the CRA and expressed concern that such lapse undermined public confidence in the government and its functionaries and raised question marks on the regulatory oversight.
“The matter will be thoroughly investigated in accordance with Ogra’s SOPs and the prevailing legal framework”, Ogra Chairman Masroor Khan said and promised to take corrective actions if discrepancies were confirmed.
A spokesperson for the SNGPL declined to comment. However, an official conceded higher charges than the “maximum LPG consumer price” notified by the regulator. He said Ogra had set a consumer price that was lower than even the LPG import price, and the SNGPL was supplying it to consumers at zero profit on the federal government’s directive as a public service. He claimed that Rs300 per domestic cylinder higher rate than Ogra notified rate charged by the SNGPL covered the actual transportation cost. “These are delivery charges only”, he said.
The official said SNGPL was being hunted by others as private companies were charging significantly higher rates because actual weighted average cost of imported and local LPG went beyond Ogra notified rates in winters.
Ogra’s LPG price notification issued on Dec 31 for January showed the federal government’s policy directions issued on Nov 30, 2024 saying the “maximum price of indigenous LPG which shall be regulated as the maximum LPG price at all levels of the supply chain for indigenous as well as imported LPG”.
Published in Dawn, January 11th, 2025
