ISLAMABAD: Prime Minister Mian Nawaz Sharif has stopped the authorities concerned from hiking the gas tariff from July 1, 2013, fearing it could trigger a further rise in inflation in the month of Ramazan.
However, the Ministry of Petroleum and Natural Resources (MoP&NR) can rationalise the gas prices after Ramazan in the light of the national energy policy formed by the CCI (Council of Common Interests) sometime in the first 10 days of July.
Meanwhile, sources told The News that in an interaction with officials of the Ministry of Petroleum and Natural Resources, the visiting IMF mission pressed the government to increase gas prices.
The gas tariff is twice adjusted in a financial year and this needs to be raised from July 1, 2013. However, the premier in a meeting held on Thursday with Minister Shahid Khaqan Abbasi and top officials of the MoP&NR, Minister of Water and Power Khwaja Asif and Adviser to the PM on Energy Dr Mussadiq asked the authorities not to increase the gas tariff from July 1, 2013.
The Oil and Gas Regulatory Authority (Ogra) was earlier determined to raise the gas tariff by Rs8.72 per million cubic feet gas per day for the next financial year scheduled to be effective from July 1, 2013, and the top mandarins of MoP&NR had decided to raise the CNG price from the existing 49 percent parity with petrol to 85-95 percent.
Likewise, the government wanted to raise the gas tariff of captive power plants from the existing Rs488 per mmbtu to more than the cost of furnace oil, hovering at around Rs1,300-1,400 per mmbtu, and also planned to increase the gas tariff for fertiliser plants from the existing Rs123 per mmbtu to Rs550-600 per mmbtu. The prime minister, however, asked to delay the rationalisation of gas prices after the month of Ramadan.
The prime minister has been sensitised about the existing production of gas, which stands at 4 billion cubic feet per day and the contract demand stands at 8 bcfd. The proven reserves stand at 26 trillion cubic feet per day and if further indigenous exploration activities are not carried out and no gas is imported, then the existing gas reservoirs will deplete in 7-8 years.
In the last five to six years, no more gas was explored because of a non attractive petroleum policy and law and order situation. Now the alluring petroleum policy is very much there but the law and order situation is not allowing the E&P companies to carry out their activities.
The prime minister was also sensitised about the latest status on the import of gas from Iran and Turkmenistan. He was also told that India had offered to export LNG to Pakistan. When asked if the prime minister has given any direction to expedite the process to materialise the IP gas line, the official said that no directive was issued. However, the prime minister has said that all options need to be exercised to bridge the rising gas deficit in the country.
A press release issued by the PM Secretariat says that Prime Minister Muhammad Nawaz Sharif has said that all resources be exploited and all avenues explored to overcome the gas shortfall in the country. Different options to import gas from the neighboring countries be examined to overcome the shortage, he added.
The PM was told that work on the Iran-Pak (IP) Gas Pipeline Project and Tajikistan-Afghanistan-Pakistan-India (TAPI) Gas Pipeline Project was in progress. The prime minister was also informed that India was interested in exporting LNG to Pakistan.
The meeting was informed that domestic consumption of gas constitutes 28% of the total national use of the resource. The PM gave clear directions to the Ministry of Petroleum that domestic consumers be given precedence in the gas distribution formula over other sectors of the economy so that their daily routine life remained undisturbed.
The meeting was further informed that in order to bridge the gap between demand and supply, load management of gas was done and this was particularly so during the winter season when the demand for gas increases exponentially. The prime minister directed to rationalise the gas tariff to safeguard the interests of the common man.
(Courtesy: The News)