Petroleum Division demands bridging gap of gas prices supplied to domestic consumers

Petroleum Division demands bridging gap of gas prices supplied to domestic consumers

The Petroleum Division has asked the government to devise a mechanism for the recovery of the difference of Rs1250 per MMBTU between indigenous gas and RLNG supplied to domestic consumers during ongoing winter season. There is no mechanism for recovery of price of RLNG from consumers as its price is Rs1600 MMBTU and it is being supplied to domestic consumers at Rs350 per MMBTU, therefore there is a need to devise a mechanism for recovery for diversion of RLNG, said Secretary Petroleum Division in a presentation to Cabinet Committee on Energy (CCoE).

The CCoE was informed that total gas supply of SNGPL and SSGCL including indigenous gas and LNG through Pipelines is 3038 MMCFD. As  per Natural gas allocation and management priority domestic and Commercial consumers are on the top priority followed by Power sector and General Industry, General Fertilizer and Captive Power, Cement Sector and Its captive power and CNG sector.

It was informed that both utilities companies i.e. SNGPL and SSGCI carry out gas load management plan at their own, In light of above merit order. The plan for curtailment of supply of gas is started from bottom to top in the merit order.

The committee was informed that against demand of 1250 MMCFD, SSGCL supplied 1155 MMCFD gas In December. 2019. There was shortfall of 95 MMCFD. According to documnet available with The Nation, shaortfall was managed through curtailment in gas supply to K-Electric, CNG Sector and Captive Power plants to ensure full supplies to domestic/ commercial consumers and Power Sector.

The meeting was apprised about the projected position of gas demand, supply and shortfall during January-March, 2020.

The shortfall will also be managed by SSGCL through curtailment. However, supply to curtailed gas sectors will be restored from March, 2020. Regarding the gas supply of SNGPL in December, 2019, it was Informed that against demand of 1965 MMCFD, SNGPL supplied 1847 MMCFD gas (Including 925 MMCFD indigenous gas and rest was LNG). There was a shortfall of 118 MMCFD. Due to Increase In demand of gas by domestic sector, RLNG was added in the system Besides, some curtailment was also made In gas supply to CNG, Power and industrial sectors to meet domestic demand. Secretary Petroleum Division informed the meeting about domestic sector consumption pattern on SNGPL system.

It was stated that average consumption of domestic sector during summer (April to November, 2019) was 488 MMCFD, whereas consumption was increased substantially in December, 2019, which was managed through diversion of RLNG.

There is no mechanism for recovery of price of RLNG from consumers as its price is Rs.1600 MMBTU and It Is being supplies to domestic consumers at Rs350 per MMBTU.

There is a need to devise a mechanism for recovery for diversion of RLNG. Further there is no Weighted Average Cost of Gas because of OGRA Act. The meeting was apprised about province wise position of indigenous gas production, supply and consumption. Surplus of gas In Sindh, Khyber Pakhtunkhwa and Balochistan is being provided to Punjab to meet its shortfall according to gas allocation as approved by the ECC.

It was also informed that in 2019, 531 MMCFD gas was allocated to SNGPL from gas fields of Sindh.

The meeting was apprised that It was projected in February 2019 that there would be a shortfall of 255mmcfd + 15 percent in winter 2019-20. Winter management plan was prepared accordingly.

Work started to add 70mmcfd in SSGC system and take LNG supplies for SNGPL (up to 1300mmcfd). Both measures required Right of Ways (ROWs) by Government of Sindh. Despite continuous follow up since summer 2019, ROWs were not provided, except one ROW which was provided in early December.

As a result 70 MMCFD is likely to be added to the SSGC system by the end of January.

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