ISLAMABAD: Minister for Energy Omar Ayub Khan has informed the Senate standing committee on petroleum that Pakistan is currently facing a gas shortfall of about 3.5 billion cubic feet per day (BCFD) and Sindh will also be turning a gas-deficit province by next year.

While testifying before a panel of the parliament’s upper house on Monday, Mr Khan said gas loadshedding would continue during the upcoming winter as the production of indigenous gas was decreasing while the demand was on the rise.

He said all the provinces would have to sit together and find out a solution to the country’s gas shortage in an amicable manner. The federal government, he said, would take the matter pertaining to the gas distribution among the provinces to the Council of Common Interests (CCI), as the senators blamed the government for violation of Article 158 and 172 of the Constitution.

He said all the provinces would have to make a joint decision on the issue of gas shortage. Against the total indigenous production of 3.5BCFD, the total demand was exceeding 7BCFD. The deficit was filled with expensive imported gas, he said, adding that the government was providing subsidy on the imported gas which was increasing the circular debt.

Senate panel told loadshedding will continue in winter; distribution mechanism to be discussed at CCI meeting

He said Sindh would also have no surplus gas from next year onwards and the province would not be able to meet its own demand from its production. Out of total gas supplies, Sindh itself was consuming about 1.56BCFD and only 260mmcfd gas of Sindh was being provided to Punjab, the minister added.

The Senate standing committee on petroleum was presided over by Pakistan Tehreek-i-Insaf (PTI) Senator Mohsin Aziz.

Mr Khan said the government would hold a conference on the issue of gas distribution and all the provincial chief ministers would attend it. The conference would evolve a joint position on the issue of gas distribution and its recommendations would be submitted to the CCI, he added.

Pakistan Peoples Party (PPP) Senator Sassui Palijo said Articles 158 and 172 of the Constitution were being violated in winter against the interests and rights of Sindh province, which was providing gas to the other provinces but was facing gas shortage. She said that any unconstitutional act regarding the distribution of gas would be resisted.

18th Amendment

Senator Sherry Rehman said there should be no issue of interpretation of the 18th Amendment and the federal government should provide representation to the provinces in the Oil & Gas Regulatory Authority (Ogra), Pakistan Petroleum Limited board and all other such institutions.

National Party (NP) Senator Mir Kabeer Shahi said that non-provision of gas to the residents of gas-producing areas of Sindh, Balochistan and Khyber Pakhtunkhwa was creating a sense of deprivation among these populations. He also said Articles 158 and 172 of the Constitution regarding gas distribution were not being implemented.

Balochistan National Party-Mengal (BNP-M) Senator Dr Jehanzeb Jamaldini said the problem faced by the provinces should be resolved promptly without any delay.

PPP Senator Quartulain Marri from Sindh said there was a huge difference between the information provided by the provinces and the federal government regarding gas production and distribution. She demanded that full data regarding the gas production from the provinces and its distribution be shared with the standing committee.

The Senate committee also discussed the matter related to halting of gas supply by the Sui Southern Gas Company (SSGC) after revoking the contract with the largest LPG producer company Jamshoro Joint Venture Limited (JJVL) in June 2020.

JJVL representatives informed the committee that the local LPG production witnessed the loss of 9000 metric tonnes per month, while the revoking of the contract between the SSGC and JJVL led to the monthly loss of Rs170 million to the national kitty under the head of sales tax.

The petroleum division director general for gas told the committee that the JJVL agreement, which was for 18 months as per Supreme Court order, expired on the term completion. He said it was purely a term agreement on profit sharing between SSGCL and JJVL and the SSGCL board did not renew it. He said the decision was based on commercial, legal and technical grounds.

The Senate committee asked the SSGCL to revisit its decision of revoking gas supply contract with largest LPG producer in large national interest.

Published in Dawn, August 11th, 2020