Minister for Petroleum Dr Asim Hussain, while terming the compressed natural gas (CNG) promotion policy by the previous government as a false step, has aimed to phase-out the CNG sector gradually throughout Pakistan in coming years to save the industrial and domestic sector from gas curtailments in future.
“Pakistan Peoples Party government has evolved a policy to diminish the CNG sector by not issuing new licenses and not renewing contracts of operational CNG stations”, said Hussain in a press briefing. Those CNG stations whose 15-year licences mature in the future will not be renewed as we believe that the CNG sector has destroyed other sectors, he said. Interestingly Hussain, who blames previous government for CNG promotion, held an unofficial meeting with the Deputy Prime Minister Chaudhry Pervez Elahi, a strong supporter of promoting CNG during his previous tenure, before meeting journalists for the briefing.
CNG is a cheap fuel which might be good for individuals, but not for the overall economy, Punjab is consuming 320 millions of cubic feet per day (mmcfd) of gas in the shape of CNG, whereas Sindh is consuming 140 mmcfd, he said. Pakistan’s total gas requirement is 8 billion cubic feet (bcf), whereas it only produces 4 bcf, fulfilling the deficit through imports, the shortfall will be covered by importing liquefied natural gas (LNG) in coming years.
Earlier, the Oil and Gas Regulatory Authority (Ogra) decided to give permission to Pakistan State Oil (PSO) for setting up 26 liquefied petroleum gas (LPG) filling stations at its retail outlets across the country, officials say. Overall, the government is targeting to set up 100 LPG stations at retail outlets of PSO, in a bid to gradually phase out CNG stations over the next two years as per plan announced by the adviser to prime minister on petroleum and natural resources.
“The people of Pakistan will have to bear the gas shortage for another couple of years, after which things would start to normalise, Hussain said. The shortage exists mainly due to uneven gas exploration policy, he said.
Hussain, however, said that the government will manage to import LNG this winter to provide adequate gas to the industrial sector. “We do not want to destroy any of our industry due to gas shortages and are working to streamline the system”, he said. “We are also finalising a policy to save our fertiliser sector by providing them 10% of gas directly from gas producers, so the burden on the network of gas distribution companies eases, he said. Currently only three sectors, domestic, CNG and industrial sector have been provided gas, he said.
Talking about the Iran-Pakistan pipeline, Hussain said that the pipeline is 100 kilometres away from Pakistan’s border and the perception that Iran has laid the pipeline and Pakistan is reluctant is unfair. He suggested that petroleum prices should be revised weekly similar to the international markets where the mechanism works on a daily basis.
“However, in Pakistan we cannot afford to fluctuate the energy prices daily, but it should be recalculated on a weekly basis instead of every 15 days”, Hussain said.
Talking about the increased usage of gas generators in posh areas, Hussain said that we are framing a policy in this regard; however we might not implement it till the crisis persists as these generators provide relief to the citizens during the load-shedding hours. However he said that soon we will charge 25% extra on bills for those who use the generators of more than 500 kilo-volt-amperes.
Pakistan is the largest user of CNG in the world, overtaking Iran, Argentina and Brazil in the number of vehicles using gas as fuel, replacing more polluting fuels, according to the economic survey 2010-11. A total 2.74 million vehicles are running on CNG fuel in Pakistan which accounts for almost two-thirds of cars and small commercial vehicles, according to the International Association for Natural Gas Vehicles. The country also holds the record for most number of CNG stations.
Published in The Express Tribune, July 31st, 2012.