The World Bank (WB) has expressed serious concern over the slow progress in restructuring of Sui Northern Gas Pipeline Limited (SNGPL) and Sui Southern Gas Company Limited (SSGC), it is learnt. The observation came at a time when the Economic Co-ordination Committee (ECC) of the Cabinet rejected a summary of Privatisation Commission regarding restructuring and privatisation of the gas companies. The Ministry of Privatisation and the Oil and Gas Regulatory Authority (Ogra) had different viewpoints on restructuring of gas transmission and distribution systems.
The bank says that current gas price adjustment, though based on fluctuation in international oil price, it only enables the gas sector to remain solvent as there has been no progress on restructuring the first slab for household consumers or in making the subsidy to the fertilizer industry transparent and through budget.
Sources quoted the bank as saying that Ogra is still not empowered to fix retail tariff, as the government is reluctant to transfer such powers to the regulator.
However, the government informed the bank that work on 'Gas Master Plan' (GMP) has been undertaken by consultants and is in the final stage of completion. It was envisaged that consultant's recommendations on domestic gas utilisation, system expansion and gas storage would be submitted to the government next month.
The bank also showed concern for not passing on the full impact of oil prices to the consumers, adding that reduction in collection of petroleum levy for fiscal 2005 (assuming the current level of international oil prices) was estimated between Rs 30 and 35 billion.
According to sources, the bank was informed by the government that white oil pipeline project has been commissioned and long-distance petroleum products transportation was taking place in an environmentally efficient and safe manner.
The bank observed that the divestment process of Pakistan State Oil (PSO) was in advanced stage and three bidders were actively interested in the transaction. However, there has been no progress on making petroleum downstream markets more competitive or phasing out the subsidies to the refineries.
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