Gas crisis: Stakeholders agree on new load management plan

Violators of the rationing plan will be prosecuted under the Gas Theft Act 2011.

ISLAMABAD:

The government and major consumers of natural gas agreed on Friday to a load management agreement that would ration gas over the winter months, as the shortage of natural gas in the country jumps to 1,600 million cubic feet per day, 33% higher than last year.

A critical element of the new rationing plan was the enforcement mechanism: any entity found violating the agreement would be prosecuted under the Gas Theft Act 2011, which can result in imprisonment of up to 14 years and fines of up to Rs10 million.

The decision was taken at a meeting chaired by Petroleum Minister Asim Hussain and was attended by representatives from all the lobbies that have a stake in the gas crisis: the All Pakistan Compressed Natural Gas Association, the All Pakistan Textile Mills Association, fertiliser companies as well as Sui Northern Gas Pipelines and the Sui Southern Gas Company.

The plan seems to involve at least some more sacrifice on the part of Sind, the province that is constitutionally entitled to the lion’s share of the gas supply since about 71% of it comes from gas fields in Sindh. According to the plan, the gas supply to compressed natural gas stations (supplying vehicles) in Sindh would be cut for 36 hours, an increase over the previously announced 24 hours.

Gas supply to industrial units in Sindh – mainly textile manufacturers – will remain suspended on Sundays. However, the army-owned Fauji Fertilizers will continue to receive gas until December 31, to help facilitate the production of urea and reduce the shortage in the country.

Meanwhile, industries in Punjab would get about half a day of respite: instead of a four-day shutdown of gas supply, they will now face a three-and-a-half-day gas shutdown. The four fertiliser plants based on the SNGP, however, will face a complete cut-off of their gas supply.

The four plants include Pak-Arab Fertilizer, Agritech Fertilizer, Dawood Hercules Fertilizer, and Engro Corporation’s mammoth new urea manufacturing facility in Deharki, Sindh. As a result of the cut-off, the government will have to arrange for the import of 1.2 million tons of urea for the Rabi (winter growing season), the exact same amount that Engro’s plant in Dharki could produce if it were to receive the uninterrupted gas supply that the government is contractually obligated to provide the company.

CNG stations on the SNGP network – which supplies Punjab and Khyber-Pakhtunkhwa – will face three-day shutdowns. The exception to this rule is the Islamabad region, ostensibly to comply with court orders.

Domestic consumers are also expected to see periodic shutdowns of their gas supply. Hussain directed the state-owned SNGP and SSGC to make arrangements to bottle liquefied petroleum gas (LPG) for consumers to help overcome the shortage in the winter months. The ministry estimates that the gas shortage will be 1,600 mmcfd, about 33% higher than last winter.

The petroleum ministry said that it was also decided that any sector defying the mutually agreed gas load management plan would be considered to be in violation of the Gas Theft Act 2011, and would be punished according to the law.

The minister also appealed to the public to adopt conservation methods for consuming gas and help the government identify violators of the rationing plans. “A solution to the gas shortage depends on the cooperation of all stakeholders,” said Asim Hussain.

Published in The Express Tribune, December 17^th, 2011.