Govt likely to remove the MDs of Sui Companies

The government hopes that a change in management at the Sui businesses will assist in alleviating the country’s current petrol losses and energy crises. The government is likely to dismiss the Managing Directors (MDs) of Sui Northern Gas Pipelines Limited and Sui Southern Gas Company Limited due to their performance, in particular their failure to reach loss reduction targets.

According to reputable sources, Prime Minister Shehbaz Sharif has taken note of the “poor performance” of the MDs of SNGPL & SSGCL for failing to meet given targets and preventing billions of rupees in gas losses. In addition, the Secretary of Petroleum, upon discovering a direction from the PM Office, has requested clarification from both MDs regarding precedence.

After getting the appropriate explanation from the two MDs, it is believed that a procedure will be begun to remove both MDs (Ali Javed Hamdani of SNGPL and Imran Mainiar of SSGCL) from the top lucrative positions of the sui firms (SNGPL & SSGCL) by their respective Boards of Directors (BoDs).

Premier dissatisfied with the performance of MDs of SNGPL & SSGCL due to “poor performance,” inability to reach loss-cutting aim (Unaccounted for Gas), which resulted in billions of rupees in losses, and depriving Balochistan of gas supply during winter season, according to sources. “Both sui firms have failed to fulfil their set targets to date, and they also missed their UfG reduction targets for 2019, 2020, 2021, and 2022, according to sources.

PM Sharif is dissatisfied with the performance of MD SSGCL and MD SNGPL, according to the report, and has instructed the petroleum division to hold the management of the two firms accountable for failing to meet their set goals. According to other sources, the petroleum division presented with the Prime Minister’s Office on 20-12-2022 information pertaining to the loss reduction goals of the two petrol firms (SNGPL & SSGCL). In addition, the PMO found that SSGCL had met only seven out of ten reported metrics, while falling approximately 50 percent short of the UfG reduction objective for fiscal year (FY) 2019-20. Similarly, the SSGC accomplished only three of ten declared KPIs in FY 2020-21, and its UfG reduction objective was exceeded by 25 percent.

In addition, its (SSGCL) UfG loss grew in FY 2021-2022, as opposed to decreasing. In addition, comparable data on SNGPL does not indicate targets, so achievements on reported 13 indicators cannot be compared to any benchmark nor to SSGCL’s performance, according to sources citing the PMO’s observations on the data submitted by the petroleum division regarding loss reduction targets for SNGPL & SSGCL.

According to sources, the petroleum division has provided information on 10 and 13 Key Monitoring Indicators for SSGCL and SNGPL, respectively, out of a total of 30. (KMIs).

They stated that the petroleum division had provided insufficient information about loss reduction targets for SNGPL and SSGCL, prompting the PMO to request that the petroleum division provide the final figures, which should be validated by the Oil and Gas Regulatory Authority (OGRA).

According to sources, OGRA had previously conducted a study to determine the causes of the petrol sector’s losses and make recommendations to curb the menace of petrol losses, which has been causing substantial economic losses to the country, as well as to bind sui companies to meet certain targets if they wished to receive allowance for high UfG. However, both petrol firms (SSGCL & SNGPL) have been unable to reduce the petrol sector’s losses due to both known and unknown factors.

According to further sources, SNGPL and SSGCL have requested that OGRA authorise 7.6% UfG for them. However, the OGRA has only authorised 5% UfG for the two sui firms and has tied the remaining 2.6% UfG to 30 KMIs. According to sources, both sui petrol utilities have failed to meet the 30 KMIs, and OGRA has permitted only 1.6% UfG for both.