OGRA, however, had given approval for up to 36% hike in tariff. PHOTO: AFP
The announcement sprang a surprise as the Oil and Gas Regulatory Authority (Ogra) had recently decided to increase gas prices up to 36% for the ongoing financial year 2016-17. The government reviews gas prices every six months.
Petrol price increased by Rs1.50 per litre
Speaking at a press conference on Thursday, the petroleum minister, flanked by Oil and Gas Development Company (OGDC) Board Chairman Zahid Muzaffar and CEO Zahid Mir, said domestic consumers in Punjab were coping with 40% gas shortage because of application of Article 158 of the Constitution.
Under the article, the government is bound to provide gas first to the energy producing province.
“The Council of Common Interests (CCI) needs to review this clause for uniform distribution of gas among domestic consumers in all provinces,” Abbasi stressed, but added the supply situation in Punjab in winter this year would be better compared to the previous year.
He revealed that Sui Northern Gas Pipelines had given fresh connections to 1 million consumers and said the government had followed merit policy in giving the gas connections.
Speaking about oil and gas discoveries, the minister claimed that the success rate had jumped from 31% to 55% during the tenure of the current government.
The oil and gas exploration activity increased 40% during the period and 90 hydrocarbon discoveries were made from drilling 319 wells.
SSGC wants OGRA to allow increase in gas price
About 466 million cubic feet of gas per day (mmcfd) from new wells and an additional 478 mmcfd from existing wells were injected into the system. In addition, 11,000 barrels of oil per day through new discoveries and 21,000 barrels per day from existing fields were added to the system.
Hitting out at the previous government for failing to install a processing plant at the Kunnar Pasakhi Deep gas field, he said OGDC had succeeded in installing the plant during the tenure of the current government.
“It will provide an additional 80 mmcfd of gas, 400 tons of liquefied petroleum gas (LPG) and 4,000 barrels of oil per day in winter this year,” he said.
The minister claimed that though oil and gas exploration had decreased 60% in the world in the wake of sharply lower crude prices, the search for hydrocarbons had been stepped up in Pakistan following the incentives offered to investors.
He denied that foreign investment in the oil and gas industry had declined and said with the supply of gas from new sources, the situation had got better.
OGDC has made three new discoveries in Sindh that will produce 30 mmcfd of gas.
Abbasi stressed that the government had succeeded in bringing down the unaccounted-for-gas losses by 3%.
The federal government has reached an understanding to give legal cover to the illegal gas connections. Gas companies will provide 60% of funds whereas Khyber-Pakhtunkhwa will provide the remaining 40% finances.
He said the CCI had given approval for regulating the LPG prices. Imports of the gas have also risen 100%.
He revealed that the second LNG terminal would start functioning by the end of June 2017 and it would handle 600 mmcfd of gas.
Published in The Express Tribune, November 4th, 2016.
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