Gas allocations

Published July 27, 2016

THE proposal to treat all household consumers of natural gas across the country equally when it comes to allocation may sound correct in principle but is a bad idea if pursued in the teeth of opposition from the provinces.

The growth of domestic consumers of gas is highest in Punjab, where SNGPL — the company responsible for gas distribution in Punjab and KP — has just added more than a quarter of a million new domestic consumers, as per the latest annual report on the company’s website.

In the year before, it had added more than 280,000 new domestic consumers. With election season not far off, it appears the government is in a mood to enhance these numbers, and put in place arrangements to ensure that gas flows through these connections when campaigning begins.

Ironically, when listing the reasons for the high levels of losses being suffered by SNGPL, the directors put a substantial portion of the blame on an “[u]nprecedented extension in the distribution network on the basis of GOP socio-economic agenda”.

Now the petroleum ministry is asking the provinces to support a measure that would give domestic consumers across the country equal entitlement to gas — going against the principle enshrined in the Constitution which states that consumers in provinces where the gas is produced have the first right over its use.

Not surprisingly, the provinces resisted the move in their meeting with the petroleum minister on Monday, and, instead, used the opportunity to table their own grievances about gas allocations.

It is understandable that upcountry domestic consumers have a greater need for the vital fuel in winter since temperatures there are lower, but even the government of KP resisted the move, and its citizens have to endure some of the lowest temperatures in the country.

The provinces have a valid point that the proposed revision of the gas allocation formula would benefit Punjab more than the other provinces since the growth of domestic consumers there is the highest.

If the government is serious about the proposal, it should realise that it touches on powerful interprovincial politics and that it must work at a higher level to first build a consensus, failing which it would be a mistake to try and advance the proposal through executive fiat or via administrative gimmickry.

Leaving it to the ministry and the Council of Common Interests to ensure the passage of such a proposal is a recipe for failure.

Published in Dawn, July 27th, 2016

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