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The government is being chastised by a NA panel over rising energy costs and shortages

ISLAMABAD: The Ministry of Energy said on Tuesday that non-availability of even a single offer against contracts for the purchase of eight LNG cargoes, stay orders gained by industry against rationing, and price issues were important factors for the gas scarcity, despite criticism from legislators.

The Petroleum Division came under fire during a meeting of the National Assembly’s Standing Committee on Petroleum, which was presided over by Junaid Akbar, for gas shortages around the country and price hikes on petroleum goods.

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The acting director general of gas told the committee that keeping in view the gas requirement, the government had invited tenders in October for eight LNG cargoes to meet peak winter demand but no bidder turned up. He said the country also did not have gas storage capacity otherwise advance imports could be arranged in lean period.

A senior official of the Petroleum Division reported that it had fielded a technical study for development of underground gas storage so that the issue could be tackled permanently. He said the gas pricing was also a major challenge because there was no law on determination of imported gas and the matter was being dealt with under an ad hoc mechanism.

He said 58pc of Sui Northern Gas Pipelines Ltd consumers belonged to the residential sector and the Oil and Gas Regulatory Authority (Ogra) law would have to be amended for creation of gas basket for imported LNG. It was reported that gas cut had been applied to CNG, cement and captive power plants of the industrial sector and supply cuts were now also affecting the power sector.

On a question on gas shortages in Karachi, the committee was informed by the representatives of Sui Southern Gas Company Ltd (SSGCL) that the company faced about 100 million cubic feet per day of gas shortage in December which could go up to 280mmcfd in January.

He said the SSGCL was following the gas load management plan approved by the federal government. However, the industries in Karachi had secured stay orders against load management, constraining the gas utility to ensure full gas supplies to residential consumers. He said Karachi was also facing higher shortages because of increased demand in Balochistan, particularly in Quetta due to extreme cold weather.

While answering to the committee regarding price hikes in petroleum products, the Petroleum Division officials stated the government was constrained to raise prices due to international rise in the prices. The members said the prices of petroleum products were raised substantially but reductions were only peanuts.

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The committee inquired from Ogra chairman Masroor Khan whether there was any political pressure on him or the Ogra officials regarding their official functional commitments who categorically reported that there was no pressure at all and the Ogra members and staff were performing their duties within respective rules and regulations.

The committee deferred the bill ‘The Petroleum (Amendment) Bill 2021 (Govt Bill)’ as the Petroleum Division sought more time to complete the consultation process with relevant stakeholders.

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