Petrobangla to legalise illegal gas consumers

Failing to take any legal action against the distribution agencies for giving illegal gas connections to domestic consumers, Petrobangla is planning to penalise thousands of consumers who have been paying their bills to gas distribution agencies. The state-owned oil and gas company has set June 20, 2013 as the deadline for “legalising” the unauthorised gas connections. Petrobangla chairman Dr Hossain Monsur said on Tuesday that although they were paying their bills regularly to the distribution agencies, the consumers would have to face penalty if their connections were not legalised by June 20.

The Petrobangla chief also said that in the past two and a half years, more than 117,414 domestic connections had been given by the officials of Titas Gas Distribution and Transmission Agency against the decision of the authority. As a result, they had received several hundred crores of taka from the illegal domestic consumers in their fake accounts.

Though the Petrobangla chairman said that the government would take action against the Titas officials involved in the illegal deals, nothing has been done in the last couple of years.

Many questioned why the consumers would suffer for the misdeeds of dishonest Titas officials, who, on the one hand, provided unauthorised connections to the consumers, and on the other, realised bills from the consumers.

Why one should be called an illegal consumer when they were paying their bills regularly, a consumer said, adding that the Titas employees provided them the account numbers for paying the bills.

As per Petrobangla’s announcement, the existing illegal gas connections would be authorised first and then the agencies would give priority to those who had collected “demand note” from the distribution agencies.

Titas asked the illegal consumers to apply for new gas connections to make their existing connections legal by paying Tk. 6,750 as penalty by June 20, failing which, the consumers would face legal action, up to six months in jail.

“What nonsense! Why would I be fined? The government snapped the gas connection when we booked this flat. We do not have extra space in our kitchen to install a gas cylinder, nor can we use wood for fire”, said a disgruntled consumer.

According to Petrobangla, each consumer having a double-burner oven has to deposit Tk. 6,750 (a year’s bills at a flat rate, plus three months’ equivalent bills as penalty) to the respective gas companies to legalise the illegal connections.

After the money has been deposited, consumers will have to pay regular bills from June 1. They have to keep a counterpart of the payment receipt, in case a mobile court visits their locality.

The government officially suspended new domestic gas connections in July 2009.

However, according to Petrobangla’s official statement, domestic consumers are still getting connections in exchange for undercover payment and by lobbying the distribution agencies.

The Petrobangla chairman said, “Titas authorities collected Tk. 200 crore as bills from 57,414 illegal connections and we found that about 58,000 thousand consumers were not paying any money against their gas consumption”.

He also said that the total number of illegal gas burners was 57,414, against which Tk. 116.86 crore had been deposited with Titas Gas. “But this money is not in the official Titas account as it came from the illegal consumers”, he added.

To stop all this, the High Court, on Apr 16, revoked its earlier order against giving new gas connections. However, the new order rotted under red tape as the energy adviser was reluctant to allow the distribution agencies to give new connections.

Finally, Prime Minister Sheikh Hasina, who is also the energy minister, on May 7, directed the authorities concerned to take immediate measures to start giving new gas connections to the domestic consumers across the country.

“Petrobangla estimates that around 31.47-mmcf gas is needed to fulfil the demand of residential consumers across the country, and currently 11.08-mmcf gas is being consumed illegally. As a result, our net requirement to meet the hidden demand of residential consumers is only 20 mmcf gas per day”, Hossain Monsur told The Independent.

Petrobangla earlier estimated that around 10-mmcf gas was being used illegally from the national grid every day.

According to energy ministry estimates, domestic consumers are using around 220-mmcf gas per day. However, Petrobangla daily production capacity is around 2,243 mmcf.

The Petrobangla chief also said that a number of government officials, including bureaucrats, were having illegal gas connections in their homes.

At a press conference, Nowshad Islam, managing director of Titas Gas, said that his company would start giving new connections soon, possibly within the next week.

“We hope to start giving physical connections by next week. We are facing manpower and equipment shortage. So, it may take some time to provide connections to all consumers in one day.

At the most, we can provide 300 connections per day”, he added.

“I would like to urge consumers not to pay any extra money to any Titas gas officials”, he said. In case anybody asked for extra money, they should be reported against to Petrobangla, he added.

“We have initiated an inquiry into the matter and will take action after it is completed”, he told reporters.

He also said that he was in favour of providing gas connections to household consumers, but a quarter within the government misled the policymakers into halting the process.

Source:   Independent

Action against illegal gas connections needed

New gas connections to households have begun from this week after a long suspension for nearly three years. This is a good piece of news for those who were waiting for this for years together. Earlier, the Energy Division resumed new gas connections to industries on selective basis last year.
Despite the embargo on new connections, a section of unscrupulous officials and employees of different state-owned gas marketing and distribution companies provided illegal gas connections allegedly in exchange of bribe. The Petrobangla chairman alleged that the government lost revenue worth at least Tk 1.8 million (US$ 30,000) everyday due to illegal gas connections to household consumers alone. Petrobangla made a survey over illegal gas connections and found that around 9.0 million cubic feet a day (mmcfd) of gas was pilfered through the illegal connections to households.

Petrobangla identified that over 1,17,414 domestic connections were given in the Titas gas distribution and transmission area in violation of the decision of the authority in the last two-and-a-half years. The Titas authorities collected Tk. 2.0 billion as bills from 57,414 illegal connections. It was also found that about 60,000 consumers did not pay any money for their consumption of gas. Petrobangla estimates that around 31.47 mmcf gas is needed to meet the demand of residential consumers across the country. Already 11.08 mmcf gas are being consumed illegally. So the requirement for meeting the hidden demand of residential consumers is 20 mmcf of gas. 

The most interesting point is that such kind of pilferage was occurring in broad daylight, but nobody interfered in the affairs during the last two years. Even no staff of the gas marketing and distribution companies was nabbed or penalised for such act. Only Human Rights and Peace for Bangladesh, a law firm, came to the scene and filed a writ petition in November 2012 with the High Court (HC), seeking an embargo on such illegal connections. 

While announcing the lifting of ban on new gas connections, the government said that it would also legalise illegal gas connections with fiscal penalties. Analysts said such kind of widespread pilferage should not be dealt with only 'fiscal penalties'. Responsible officers and employees of the gas distribution and marketing companies should be arrested and jailed for such act. Why should only the consumers be slapped with 'fiscal penalties'? It is now clear that the errant employees of those companies lured the consumers to get the illegal connections in exchange of speed money.

According to reports, a huge sum of money, to the tune of Tk 3.0 billion, were deposited with Titas accounts by illegal gas consumers. The audit teams are unable to trace where from these money came as there are no records of these consumers. In this way, the government is losing a huge amount of money as revenue.

When the government halted gas connections to households in July 2010, it promised to restart it when the overall supply would reach 2,200 mmcfd. It also promised to rationalise the prices of liquefied petroleum gas (LPG) and piped natural gas to households. The country's overall gas production exceeded 2,200 mmcfd about one year ago. But the government took more than one year to resume gas connections. Some 15 million mmcfd has been earmarked for the new household gas connections. The decision on rationalising the LPG price is yet to be taken.

The government deserves appreciation for taking pragmatic steps to improve the capacity of the state-owned BAPEX for more gas exploration and production. The authorities expect to get adequate gas soon from the newly discovered gas fields such as Sunetra and Srikail. At present, the country is producing 2,200 mmcfd gas. Of the total production, 55 per cent is supplied to power stations, 16 per cent to industrial units and 10 per cent to fertiliser factories across the country.

In the meantime, the government is also considering increasing the prices of natural gas for domestic consumers to meet the soaring costs of hydrocarbon exploration and gas purchase and to reduce wastage. Hinting about such a move, the energy adviser said recently that the prices of gas used by domestic consumers were much lower than those of other fuels. Hence, Petrobangla has proposed raising the prices to Tk 800 a month from Tk 400 for a single-burner gas stove and to Tk 1,000 from Tk 450 for a double-burner stove. 

Experts say there cannot be any justification to increase the prices in areas where residents receive gas supply only for four to six hours a day. For industrial users, the government should look into the possible impact on the production of the units. The small and medium enterprises could see their competitiveness dented if the gas prices are increased. Also, there is a need to improve supply side management to cut down on wastage of the utility. Only raising prices as a way of easing pressure on subsidies will not work. 

The knock-on effect of the prolonged ban on domestic and industrial gas connections was huge. Housing companies were unable to hand over the readied flats to their customers. House rents in the capital went up substantially due to scarcity of flats. Industrial growth was hampered. However, with the resumption of new connections, situation is expected to improve substantially. 

The government needs to take effective measures to stop illegal gas connections. The administrative set-up of the state-owned marketing and distribution companies should be streamlined in order to ensure healthy gas management in the country. Shahiduzzaman Khan//szkhan@dhaka.net
The financial Express. Published : Sunday, 12 May 2013