As parliamentarians lobby to get prime minister’s approval for launching new gas schemes in their constituencies as part of an election strategy, the Ministry of Petroleum and Natural Resources has devised a plan to impose a complete ban on new gas connections by 2014 in the face of shortage across the country.
“The plan also includes restriction on setting up new compressed natural gas (CNG) stations. It will be sent to the prime minister for approval,” said an official of the petroleum ministry.
Gas connections might be given to those CNG stations that had completed all work by February 28, 2012, the official said, adding the prime minister would also be asked to disallow CNG consumption by private vehicles and only public vehicles might be allowed to use CNG.
The ministry also proposes to bring CNG price on a par with that of other fuels including petroleum products in a bid to discourage its consumption in the transport sector. CNG price has already gone up and stands at 55% of petrol price.
“In the next phase, CNG price will be increased to 80% of the petrol price to discourage its consumption,” the official said.
In an attempt to reduce CNG usage, the government is also working on a new liquefied petroleum gas (LPG) policy to bring down its price so that CNG stations could be converted to LPG outlets. As a first step, Petroleum Minister Dr Asim Hussain has announced that Pakistan State Oil (PSO) will set up 100 LPG stations.
In its plan, the petroleum ministry proposes that gas connections to the commercial sector should be banned by 2014. High-rise buildings and new housing societies should also not be provided with new gas connections.
In the end, the ministry proposes that gas connections to new towns and villages should be disallowed by 2014.
“We are receiving directives from the prime minister for gas connections to new towns and villages, but this may worsen the energy crisis,” the official said, adding the premier would be asked not to issue any such directives by 2014.
In their petitions filed with the Oil and Gas Regulatory Authority (Ogra), state-owned gas companies – Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) – have sought permission to charge Rs23.88 per million British thermal units (mmbtu) and Rs32.48 per mmbtu respectively from the consumers for laying a new transmission and distribution network.
SNGPL and SSGC are working on 2,900 ongoing schemes costing Rs30 billion and 944 new schemes costing Rs7.8 billion. They have completed 46% and 70% work respectively on these schemes.
These schemes will put an additional burden of 694 million cubic feet of gas per day (mmcfd) on the SNGPL system and 15 mmcfd on the SSGC system. SNGPL will provide gas to 1.75 million new consumers and SSGC to 65,280 consumers.
The two gas utilities have already spent Rs123 billion on laying infrastructure to provide gas to two million new consumers despite depletion of reserves over the last six years.
From 2005-06 to 2010-11, SNGPL has laid 35,000 kms of pipeline with capital expenditure of Rs80 billion to provide gas to 1.45 million new consumers. SSGC on its part has spent Rs43 billion on 14,000 kms of pipeline to provide gas to 600,000 new consumers.
Published in The Express Tribune, April 24th, 2012.
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