ISLAMABAD: With the power crisis getting worse in the country, the Economic Co-ordination Committee (ECC) of the Cabinet on Tuesday amended the 2005 Natural Gas Allocation and Management Policy to make available maximum gas supply to the power sector for enhancing generation to minimise power cuts.
Sources cited a summary submitted by the Ministry of Petroleum and Natural Resources that quoted a request of the Ministry of Water & Power for more gas supply to power plants on SNGPL's network. In the given circumstances, no other option is left but to curtail the gas supply to all fertiliser plants, diverting the same to power units.
The Ministry of Petroleum feels that until domestic gas production was enhanced through new discoveries or it was supplemented through imports (including LNG and transnational pipelines), priority should be given to the power sector, instead of fertiliser after domestic consumers.
The domestic and commercial sector would be the first priority in terms of gas provision by gas companies as was in the previous policy but second priority in the light of changes approved by the ECC would now be power sector and not fertiliser. The provision of gas to the CNG sector would be fourth priority and cement sector would be the fifth.
Sources said that the ECC was informed about the decision taken at the National Energy Conference at Lahore on April 20 this year to provide at least 207 MMCFD additional gas supply to power plants on SNGPL system. However, there was no guidance which sector's supply should be curtailed. To make available the said volumes, Ministry of Petroleum and Natural Resources directed the SNGPL to supply gas to fertiliser plants on rotational basis and divert the gas thus saved to power plants. The ECC after discussion approved Natural Gas Load Management plan proposed by Ministry of Petroleum & Natural Resources subject to approval from Prime Minister.
The ECC also approved the summary for an increase in the amount of GOP sovereign guarantee from Rs 5.3 billion to Rs 19.15 billion in favour of the local bank syndicate as a stop gap arrangement till extension/effectiveness of Foreign Loans and additional wavier of demurrage and detention charges of Rs 856.591million 425MW Nandipur Power Project. The ECC meeting was presided over by the Finance Minister Dr Abdul Hafeez Sheikh.
It constituted a committee on a summary moved by the Ministry of Railways for taking over Lahore-Karachi business train express because the joint venture partners had been unable to meet the contractual obligation and payment and penalty against them had increased to Rs 120.5 million and Rs 5.7 million, respectively. The final decision on the summary of Ministry of Railways for taking over business train would be taken in the light of committee's proposals.
The ECC also approved Rs 2.532 billion Ramazan Package for provision of 13 commodities at discounted rate it the government outlets, Utility Stores Corporation (USC). The USC would start implementing Ramazan package from July 15, 2012 and atta, ghee/oil commodity of pulses, dates and rice at cheaper rates.
The ECC approved import of LPG equivalent to 250 tonnes with a cost computed on the basis of Weighted Average Cost of Gas for LPG air mix. The final decision about procurement methodology, tendering and cost would be taken by the next ECC in the light of a detailed presentation by the Ministry of Petroleum.
The meeting also approved policy guideline on "LPG air mix, CNG or LNG based pipeline distribution projects undertaken by the Sui Northern Gas Pipelines Limited and Sui Southern Gas Company Limited. The ECC also requested the law ministry to look into the matter of price determination of LPG on monthly or six monthly basis.
The ECC deferred a Ministry of Petroleum summary regarding deregulation of High Octane Blending Component (HOBC) by removal of inland freight equalisation margin (IFEM) till the next meeting. The ECC also discussed a summary regarding protection to the motor cycle industry in Pakistan moved by Ministry of Commerce in which it proposed recommendations that new tariff lines be created in Pakistan Customs Tariff for all parts of 125cc motorcycles with 5% tariff in case of new entrants.
In the same way, the ministry proposed that while reducing duty on Completely Build Unit (CBU) and Completely Knock Down (CKD) {in case of non-assemblers} from 65% to 35%, the duties on parts and components may also be reduced as recommended by National Tariff Commission to protect the minimum cascading needed by the local industry.
After due deliberation, ECC constituted a committee comprising Ministers for Water and Power, Petroleum and Natural Resources, Information, the Chairman of BOI, the Secretary, Water & Power, DCPC and representatives of the Ministry of Industries and the FBR to look into the matter.
Other summaries which were approved by ECC were 'Revised Draft Low BTU Gas Pricing Policy, 2012', 'Policy Package for Establishment of Economic Zones Including China-Pakistan Economic Zone (CPEZ)' and 'Approval for Opening of Branch at Colombo, Sri Lanka a Request by National Bank of Pakistan'. Minister for Information & Broadcasting Qamar Zaman Kaira, who is not member of the ECC, attended the meeting for the first time.