PNGRB directs city gas companies to stop volume-based differential pricing

The Petroleum and Natural Gas Regulatory Board (PNGRB) has directed city gas companies to charge a uniform rate for household fuel, regardless of consumption levels, in a bid to end the practice of some firms charging higher prices beyond a certain usage threshold.

“It has come to the Board’s notice that certain city gas distribution (CGD) entities are implementing a telescopic pricing structure for piped natural gas (PNG) domestic consumers, wherein the per SCM (Standard Cubic Meter) price of natural gas escalates as consumption surpasses a predefined threshold,” the downstream regulator said. “Such pricing practices may inadvertently facilitate the unauthorized use of subsidized administered price mechanism (APM) gas by commercial consumers who may be misclassified as domestic consumers.”

The regulator further said that “genuine domestic consumers with higher consumption levels may be unfairly subjected to elevated charges,” despite the government supplying natural gas to CGD entities at a uniform rate.The domestic gas is sold to companies “at a concessional rate compared to market or spot LNG prices,” the regulator said.

PNGRB also advised city gas companies to undertake a thorough review of consumption patterns and “investigate anomalous cases where domestic consumers exhibit significantly higher usage relative to industry average” and, based on the findings, take suitable corrective measures.