The government has decided to provide 80 percent gas to the fertiliser industry so as to avert the possibility of fertiliser shortfall in the upcoming Rabi crop season. Sources in the Ministry of Petroleum and Natural Resources told Business Recorder that in the coming season gas supply situation would improve, as Kunar Pasaki Gas Field would become operational in October.
The Kunar Pasaki gas field is expected to produce 282 million cubic feet per day (MMCFD) as per government's plan and would be equally distributed between Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC). A top level government official said that in the coming winter SSGC and SNGPL systems would be provided with an additional 312 MMFCD gas with 282 MMCFD from Kunar Pasaki gas field and 30 MMFCD from Qadirpur gas field with a new well becoming operational soon.
"Gas supply for CNG stations and industries would be taken keeping in view the developments taking place before winter," the official added. The government is also seriously considering increasing gas outages from three to four days for CNG stations and supplying to industry for nine months a year. Dr Asim, Federal Minister for Petroleum and Natural Resources revealed in June that the government would increase gas prices for all sectors including a 100 percent increase for fertiliser sector.
Sources privy to the deliberations said that the government has assured the fertiliser industry of sufficient gas in a bid to enable them to operate at 80 percent capacity, which would reduce fertiliser imports by 0.5 to 0.7 million tons. The government has decided to ensure uninterrupted gas supply to four fertiliser plants on SNGPL network for eight months, which would enable them to operate at 80 per cent capacity.
The government spends over $927 million per year on import of 1.7 million tons of urea to meet shortages, besides extending an additional subsidy of Rs 47 billion to farmers due to the difference between imported and locally produced urea prices. Farmers in the current Kharif season faced a severe shortage of urea fertiliser as its production dwindled mainly due to gas outages threatening the output and growth of the agricultural sector. Blackmarketeers were selling a 50kg urea bag at Rs 1,600 compared to the normal price of Rs 1,300.
With high urea prices adding to their cost, farmers were requesting the government to take serious notice of the situation, especially in the Punjab. Sources said that in accordance with the decision the SNGPL would not supply gas to the fertiliser sector for 45 days in the winter season, in addition to suspension of supplies for one month during the annual field maintenance period.
Sources further revealed that Mari Gas Company would ensure uninterrupted supply of 88 percent to three fertiliser plants including Engro, Fatima and Fauji Fertilizer for the whole year. Engro plant in Sindh would be provided gas from Sui Southern Gas Company (SSGC) network. This would lead to a saving of 55 mmcfd in the SNGPL system which would be supplied to fertiliser plants in Punjab.
Four fertiliser plants on the SNGPL network have been experiencing 74 percent gas curtailment from July 15. Under the current gas load management plan, SNGPL is providing gas to Engro, Pak-Arab, Pak-American and Daud urea plants, which have been divided into two clusters and receive gas for 15 days in a month on rotational basis.
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