Licences for 550 CNG stations despite ban: permission sought to launch probe, says Asim

The Ministry of Petroleum and Natural Resources has sought permission from the government to launch an inquiry into the issuance of licences for setting up 550 CNG stations across the country despite ban. Federal Minister for Petroleum and Natural Resources, Dr Asim Hussain said this while talking to a group of journalists on Saturday.
Adding that the government has decided to distribute natural gas among all stakeholders on equitable basis so that the looming energy crisis could easily be managed.
The minister said that as per the new gas load management plan it has been decided that as many as 700 CNG stations in Sindh would remain shut for two days and 3, 000 CNG for three days in Punjab. The minister said that his ministry has a written a letter to the Cabinet Division seeking permission to launch an inquiry as to how Oil and Gas Regulatory Authority issued licenses for over 550 CNG stations across the country despite ban, adding that action would be taken against all the responsible persons irrespective of their positions.
"There are some anomalies in gas distribution as Engro's plant is situated in Sindh, whereas gas is supplied to it from Sui-Northern Gas Pipeline (SNGPL) system," he said. He said post agreement changes in the terms and conditions of the JJVL contract caused an estimated loss of Rs 6 billion to the national kitty and the ministry has consulted legal advisors and they would submit relevant documents to the court whereas the case is already in the court.
He said his ministry would recover all the outstanding dues from the industrial as well as other sectors to resolve the circular debt issue, which is creating problems for the government. To a question, he said there was no pressure on him as President and Prime Minister support his idea and he would leave no stone unturned to recover outstanding dues, which according to him are billions of rupees.
Dr Asim said the ministry has worked out new Exploration and Production (E&P) Policy, adding that the E&P Policy 2011 would be announced next month adding that the new policy would be based on energy mix. The minister said hedging would not be allowed as prices of gas and petrol are increasing in international market with each passing day, adding that hedging would prove costly.
He said new E&P policy would include a mechanism to smoothly deal with disputes in a bid to avoid cases in courts. Dr Asim said gas would be imported from Iran at Rs 1,800 per mmbtu, which would be supplied to power sector, adding that industrial sector and domestic consumers could not afford such high prices. "We have only two options, either to rely on available resources or to import gas which is available at higher rate," Dr Asim said.
The E&P companies were facing serious problems at local level, therefore they were unable to utilise their full capacity. Karachi Electricity Supply Company (KESC) requested the government to provide it an additional 260 mmcfd gas and the company would provide uninterrupted power to all the sectors, including domestic and industry.
Answering a question regarding the recent partial reduction in petroleum prices, the minister said the Petroleum Ministry recommended Ogra to provide full benefit of international fuel price reduction to people, but the Finance Ministry, creating a fiscal space, recommended partial decrease. "If we remain unable to mange energy crisis effectively, I am eyeing anarchy in coming days. Textile is the leading sector earning foreign exchange for the country so providing gas and electricity to the sector should be top priority of the government," the minister added.
The ministry has sent a summary to the Prime Minister, seeking his permission for increasing gas prices for domestic consumers, adding that his ministry approved 15 percent increase, but the Ogra has recommended 13.5 percent increase in gas tariff.
"At present Punjab needs 2500 mmcfd gas, but we are providing 2480 mmcfd, if gas supply to Punjab is reduced to 2300 mmcfd its entire system would collapse," the minister added. Dr Asim said gas tariff would be increased by 18.43 percent for industrial sector, 15 percent for commercial sector and 18.43 percent for textile sector. He said gas theft was a serious issue in the country and the ministry would take serious action against all those involved in the theft.