Govt mulls more gas rationing

Ministers oppose any further energy cuts on fears of political backlash

ISLAMABAD:

Pakistan is considering introducing a further reduction in gas supplies to domestic consumers through rationing amid the deepening Middle East war, which has disrupted oil and gas transportation through the region.

However, the ministers in a committee constituted to review energy matters opposed any gas rationing plan with the argument that it would result in a political backlash. They were afraid of triggering panic among the general public, which could come down hard on the government following a historic increase in oil prices. Further gas rationing could prove to be a political setback to the government and may favour a certain political party, they cautioned.

That's why the government has already taken measures to avoid widespread criticism from the ordinary people and has slashed the petroleum development levy on petrol, which was earlier being charged at an astronomical rate of Rs160 per litre.

At present, the domestic energy consumers are receiving gas during cooking hours. But, according to sources, the government wants to reduce supplies for one hour during cooking time to save more gas.

The federal ministers held a meeting recently during which emphasis was placed on gas rationing for residential consumers as Pakistan was facing a crisis after the suspension of liquefied natural gas (LNG) shipments from Qatar. One LNG terminal had already been shut down whereas the second terminal, which was receiving only 100 million cubic feet per day (mmcfd) of LNG, was also shut down.

Officials revealed that during the meeting it was highlighted that no gas was available for the compressed natural gas (CNG) filling stations. Domestically produced natural gas supply to CNG stations had already been banned a decade ago due to shortages and its diversion to the captive power plants of industrial units.

The gas crisis has worsened as the provision of 90 mmcfd from a gas field has been suspended due to repair work on the gas pipeline damaged by floods. Owing to such a situation, the ministers which included the petroleum and food ministers discussed the proposal of gas rationing, sources said, adding that the food minister wanted to divert gas from domestic consumers to Fatima Fertiliser, which had been shut due to gas scarcity.

"If supply is resumed from the gas field, then there will be no need for rationing to provide gas to the Fatima Fertiliser plant," a source said. Sources added that all ministers opposed the plan during the meeting and denounced the food minister for floating such a proposal. The food minister had been afraid of fertiliser shortage for farmers and therefore he supported the idea of diverting gas from domestic consumers to the fertiliser plant.

In summer, the LNG demand will start rising from power plants as electricity consumption surges because of hot weather. LNG prices have already gone sharply higher, with the power sector claiming that prices have reached levels equivalent to furnace oil rates in Pakistan.

Before the Middle East war, Pakistan had been facing a gas glut in the wake of surplus LNG. This forced Pakistan State Oil (PSO) and the Qatari company to ink a deal for diverting 24 LNG cargoes to other destinations during 2026.

Even the domestic exploration and production companies were compelled to curtail gas supply to cope with the glut. However, now the situation has reversed, with the country needing more gas to overcome the crisis.

"Now, the local gas supply has normalised and companies are not facing any curtailment. They are filling the gap left by the suspension of LNG shipments from Qatar," an official remarked.