Weighted average gas price: Federal government to start consultation with Sindh government on March 11

The federal government will start consultation with the Sindh government on March 11, 2020 on weighted average gas price mechanism in line with the decision taken in the Council of Common Interests (CCI).

A parliamentary panel on Friday was informed that Nadeem Babar, special assistant to the prime minister (SAPM) on Petroleum Division would visit Karachi to discuss with Sindh Chief Minister Syed Murad Ali Shah and Imtiaz Ahmed Shaikh, the minister for energy Sindh on weighted average gas price mechanism and distribution of natural gas to provinces under Article 158 and Article 172 (3) of the Constitution.

Federal Minister for Petroleum and Energy Omar Ayub Khan stated before Senate Standing Committee on Petroleum that the committee should defer the discussion on Sindh's reservations on distribution of gas under Article 158 and Article 172 (3) of the Constitution. The committee met here under its chairman Mohsin Aziz.

The minister announced that Nadeem Babar would be visiting Sindh to resolve national gas distribution issue in the light of the decision taken at the CCI forum on December 19, 2019.

The CCI had constituted three members sub-committee for resolution of gas distribution mechanism in consultation with the stakeholders. Later in a briefing, Musaddiq Ahmed Khan, secretary Energy Department, Government of Sindh countering the claim of Federal Minister for Petroleum and Energy stated that there was no discussion on distribution of gas as per single agenda of the scheduled meeting between Nadeem Babar and Imtiaz Ahmed Shaikh.

A consultation would be held on policy of alternate renewable energy as per the agenda, he stated. However, Federal Secretary Petroleum Mian Asad Hayaud Din said distribution of natural gas could be discussed with Provincial Energy Minister in addition to agreed agenda items, and Nadeem Babar would also meet with the chief minister Sindh separately to resolve gas issue between the federal and the provincial governments.

Quoting Article 158 of the Constitution, Musaddiq Ahmed states, the province in which a well head of natural gas was situated shall have precedence over other parts of Pakistan in meeting the requirement from that well head, subject to the commitments and obligations as on the commencing day.

He said, "Sindh is ready to take RLNG on the rates of natural gas as the province is producing 68 percent (2500-2600 mmcfd per day) of total productions of gas in the country and average requirements of Sindh in winter season is 1500-1750 mmcf per day, while Sui Southern Gas Company (SSGC) networks supply gas between 900 to 100 mmcf per day to Sindh."

Out of total consumption of gas in Sindh, he said that power plants were allocated 563 mmcfd, cement 1mmcfd, fertilizer (feed) 273mmcfd, fertilizer (fuel) 57mmcfd, other industry including textile 85mmcfd, Pakistan Steel two mmcfd, and zero-rated general industry 77mmcfd.

He said Article 172 (3) was inserted after the 18th constitutional amendment.

Article 172 (3) says ownerless property subject to the existing commitment and obligations, mineral and natural gas within the province or the territorial waters adjacent thereto shall vest jointly and equally in that province and the federal government.

He argued that the government should nominate representative from Sindh in the board of directors of the Pakistan Petroleum Limited (PPL), the Pakistan State Oil (PSO), the Sui Southern Gas Company, and the Oil and Gas Development Company Limited (OGDCL).

Members from Balochistan and the chairman committee endorsed the point of view of Sindh. The chairman remarked that the average weighted price of gas would hurt the provincial economy of the three provinces, Sindh, Balochistan and the Khyber-Pakhtunkhwa.