ISLAMABAD: The government has planned to impose surcharge on gas consumers to recover cost of the RLNG.
Special Assistant to the Prime Minister (SAPM) on Petroleum Nadeem Babar announced this on Wednesday. He, accompanied by Federal Minister for Power Omar Ayub and Secretary Petroleum Mian Asad Hayaud Din, held a media talk, here at the Petroleum Division.
Nadeem Babar announced that the gas company- the Sui Northern Gas Pipeline Limited (SNGPL) had requested the federal government for a proper mechanism to sell RLNG to the domestic and commercial consumers.
He maintained that the RLNG was defined as a petroleum product in the Oil and Gas Regulatory Authority (OGRA) Ordinance through an Act of Parliament.
“Former Minister for Petroleum Shahid Khaqan Abbasi introduced and imposed RLNG as petroleum product since 2016, which needs to be defined as gas again through Act of Parliament,” he added.
He further said the ECC approval would take the price mechanism to the federal cabinet for approval.
On July 3, 2020, the ECC in its meeting, while considering a summary decided: (i) the OGRA to provisionally allow the recovery of RLNG revenue shortfall considering the month-wise actual RLNG volumes diverted in the domestic/commercial sectors by the SNGPL, and any amount available in the deferral account would also be adjusted, while actualising the RLNG sale price, subject to verification of volumes supplied to domestic and commercial consumers by OGRA; (ii) the OGRA may create a specific head under the RLNG sale price for charging the diversion cost in a staggered manner; and (iii) upon amendment in OGRA Ordinance, 2002, for bringing RLNG in the WACOG, the balance RLNG revenue shortfall by the time amendment is made, if any, would be recouped through revenue requirements in a staggered manner.
The ECC decision provided a mechanism for recovery of past arrears of the RLNG diversion made during the past two winter seasons on the SNGPL network, which stands at Rs74 billion.
Referring to recent shortage of gas in Karachi, Nadeem Babar said that provincial government of Sindh had not informed them regarding the decision taken in the Cabinet meeting on right-of-way for laying down 17-km-long gas pipeline from Pakland to the Sui Southern Gas Company (SSGC).
“We have already completed work on 12-km-long proposed gas pipeline and awaiting approval for right-of-way to lay down rest of 5-km-long pipeline,” he added.
He further said that out of 1,200mmcfd requirement of gas for Sindh, 900mmcfd was utilised in Karachi alone.
In case, the provincial government allows to lay down pipeline, the federal government will complete the gas pipeline by third week of December to resolve the gas shortage through pumping additional RLNG gas.
He said the province was meeting 970mmcfd from its own production, and there was a shortfall of 70mmcfd, which would be met through the RLNG.
Nadeem Babar further said that on the request of industry in Karachi, the federal government was providing them gas at Rs930 per mmcfd under five months (October-February 2021) arrangement.
March-April onward, they would receive gas from the SSGCL system at previous gas rates.
Referring to a question, he said the cost of North South Pipeline had been increased by changing its route and diameter of pipeline.
The new route of around 1,700km pipeline would be laid between Karachi to Nawabshah, and the diameter of the gas pipe would be 48 inches to 56 inches.
He said the capacity of gas transmission was also enhanced from 1bcf to 1.6bcf.
The pipeline would have the capacity to increase the gas volume up to 2bcf, keeping in view, and the future need of the gas, which could reach up to 3bcf in the next 10 years.
Pakistan side nominated a technical committee and was awaiting Russian side to announce their technical team, so that the design, right-of-way of the proposed pipeline would be discussed. The two pipelines with compressors would be laid down, Nadeem Babar said. He said the government had compelled to show progress on the proposed pipeline till February 2021, in line with the directive of the Supreme Court of Pakistan in the GIDC case.
The Secretary Petroleum disclosed that the Public Accounts Committee (PAC) also directed to carry out a forensic audit of the Inter-State Gas Company (ISGC) on the delay of execution of the proposed gas pipeline project.
Nadeem Babar further disclosed that the Petroleum Division was forwarding a proposal to the Cabinet Committee on Energy (CCoE) on Thursday (today) on “Unbundling of two gas companies –the Sui Northern Gas Pipeline Limited (SNGPL) and the Sui Southern Gas Company (SSGC)”.
In first phase, the division proposed the energy committee to separate transmission business of the gas companies to distribution.
On later stage, he said, distribution task of the gas would further be distributed among the small gas companies.
Talking about the policy structure for up-gradation of fuel quality of existing oil refineries, he said the Euro-V grade petrol had already been replaced since September 1.
However, he said that 60 percent of total consumption of diesel, which refineries producing should be Euro-V standard by January 1, 2021.
He said the government and refineries had agreed on majority of the points under the new policy structure for up-gradation, and the draft would be submitted before the federal cabinet for approval within one month.
He said under import price parity would be given to refineries with condition that the indigenous diesel quality would be equal to Euro-V standard.
In case of non-compliance, they would be barred from marketing their products.
He further said that the government had been utilising LNG terminals at full capacity at 1,260mmcfd from May 2020.
As per new policy, the federal government would not buy additional unutilised capacity of the terminals.
“We have given advertisement two weeks ago for auctioning of unutilised capacity to the private sector. One RLNG cargo is available in November and two cargos are available for February,” he added.
The Petroleum Secretary said that unutilised capacity of the RLNG would also be allocated to four notified special economic zones (SEZs).
Talking about the LPG policy, he said that comprehensive policy would be finalised to bring down prices of gas at affordable level, and ensuring its availability in far-flung areas of the country.
A committee was constituted under deputy chairman Planning Commission, which would present its report in the current month.
Copyright Business Recorder, 2020
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