SATURDAY JULY 14: Gas allocation policy: plan to accord fourth priority to captive power plants shelved

ISLAMABAD: The Ministry of Petroleum is learnt to have shelved its plan to place Captive Power Plants (CPPs) at fourth priority order in gas allocation because of pressure from the top, informed sources told Business Recorder on Thursday.
The sources said that in September 2005, the Economic Coordination Committee (ECC) of Cabinet had approved the Natural Gas Allocation and Management Policy. Subse-quently, to minimise adverse impact of gas curtailment on export-oriented textile industry, the Ministry of Textile Industry submitted a summary on December 31, 2005 to the ECC, proposing to bracket gas supply order of CPPs with general industry and CNG. However, the ECC constituted a committee, which recommended that during peak winter load and/or short supply from producing fields, curtailment of gas supply to those units of CPPs in export-oriented textile sector as recommended by MTI, will be carried out in the same manner as for General Industry and CNG under Natural Gas Allocation and Management Policy 2005.
The proposal was approved by the then Prime Minister and the priority order was amended accordingly.
A writ petition titled M/s Mazhar Steel Limited Vs Federation of Pakistan through Ministry of Petroleum is under adjudication in the Lahore High Court. The petitioner contended that the amended priority order was discriminatory. The Secretary Petroleum appeared before the Court on January 26 this year and promised that necessary steps would be taken to rationalise the said policy.
In the light of the commitment before the court, the Petroleum Ministry proposed that the amendment made pursuant to the Prime Minister's approval may be repealed and the original priority order may be restored.
The Petroleum Ministry circulated its summary to Finance Division, Planning ministries of water and power, industries and textile industry for their comments. However, the Ministry of Textile Industry opposed the proposal and stated that it does not support the priority accorded to the textile industry - fourth under the current policy. The Ministry of Textile Industry indicated that they were separately submitting a case for the consideration of the ECC of the Cabinet for qaccording the same priority as the fertilizer sector - second - as envisaged in the Textile Policy 2009-14.
According to sources, the Petroleum Ministry proposed to the ECC to place all CPPs at fourth priority, which will eliminate the alleged discrimination and also maintain the existing priority for CPPs of export-oriented textile industry.
However, on July 3 this year, the Petroleum Ministry withdrew its summary from the ECC without citing any reason but insiders in the Ministry claimed that pressure had been exerted on the Ministry to withdraw the summary and shelve the plan.