ISLAMABAD: Special Assistant to Prime Minister on Petroleum and Natural Resources, Nadeem Babar has said that the existing CNG stations will continue to get indigenous gas as per existing policy.
He was briefing the Economic Coordination Committee of the Cabinet on October 7, 2020 when the issue of RLNG-based stations came under discussion.
Petroleum Division stated that pursuant to the Oil & Gas Regulatory Authority (OGRA) Ordinance, 2002 and the provisions of CNG (Production and Marketing) Rules 1992, issuance of a CNG licence to any prospective investor/applicant came under the exclusive domain of OGRA. On January 06, 2008 the then caretaker Prime Minister while receiving a presentation on review of power and gas situation inter-alia directed that the "new CNG licences in the pipeline be held-up. CNG connections should not be given except to those who have already imported CNG machines".
Petroleum Division further noted that on April 18, 2011, the then Prime Minister imposed a moratorium on provision of new industrial and commercial gas connections across the country with immediate effect for a period of six months. Before expiry of the said moratorium, then Prime Minister, on September 30, 2011 while considering a summary submitted by the Ministry of Petroleum and Natural Resources, approved certain proposals with respect to the CNG sector which were conveyed to OGRA on October 04, 2011 for taking further necessary action and consequently OGRA issued marketing licences to prospective applicants. The then Prime Minister, on January 01, 2013 while considering a summary submitted by the erstwhile Ministry of Petroleum and Natural Resources (now Petroleum Division Ministry of Energy), approved the following proposals with respect to the CNG sector: (i) ban on issuance of new provisional licenses for establishment of CNG Stations to continue; (ii) cases of CNG Stations that are 100% complete in terms of civil works and installation of equipment and approached OGRA before February 29, 2012 for pre-commissioning inspection may be processed for grant of extensions/renewals in provisional licences, where required, and grant Marketing Licenses accordingly. However, Prime Minister's Secretariat extended the date to June 30, 2012.
The meeting was apprised that the Federal Cabinet in its meeting held on April 12, 2017 while considering a summary submitted by Petroleum Division, relaxed the moratorium on new gas connection based on Re-gasified Liquefied Natural Gas (RLNG). Therefore, the gas utility companies were now in a position to provide new gas connections to the CNG sector applicants based on supply of RLNG. Further, the private sector was now taking up the import of LNG to service the CNG sector and the burden on the Government to ensure gas supply to this sector was also shifting. It was stated that CNG pricing was deregulated in 2016 by the Government and now it relied on market forces. However CNG price was still cheaper than the price of petrol in terms of MMBTUs.
Petroleum Division proposed that permission to grant new CNG licences on RLNG may be accorded and OGRA would incorporate in terms & conditions of RLNG based CNG licences that the licence is only for RLNG-based CNG and the licencee cannot claim for its conversion to indigenous gas.
During the ensuing discussion, Special Assistant to the Prime Minister on Petroleum stated that ban was imposed on licences based on shortage of indigenous gas. Now RLNG is available and cheaper than indigenous gas, hence the CNG sector may import LNG for their stations which will be sold on OGRA notified price. He also clarified that existing CNG stations will continue to get indigenous gas as per ECC approved priority.
Copyright Business Recorder, 2020