ISLAMABAD: The government has decided to remove moratorium on new gas connections for industrial and captive consumers in Balochistan after a gap of almost a decade.

For ensuring implementation of the decision, the Cabinet Committee on Energy (CCoE) has constituted a five-member committee to first approve a criterion for fresh connections.

The Petroleum Division had reported to the CCOE that almost a year ago in a meeting at the division presided over by Minister for Energy Omar Ayub Khan and Special Assistant to the Prime Minister Nadeem Babar and senior officials discussed the issue of provision of gas to industrial and captive power customers of Balochistan on the request of private sector.

Committee to finalise criterion for fresh applications

It proposed that a five-member ex-officio committee should decide and approve the industrial gas connections for the province. At first, the committee would formulate a criterion for approving the new connections to eliminate discretionary decisions. As approved by the CCOE, the committee would be led by Secretary Petroleum and comprise Secretary Energy and Secretary Industries of Balochistan, Director General Gas of Petroleum Division and Senior General Manager Sui Southern Gas Company.

The CCOE was briefed that due to increasing gap between demand and supply of natural gas in the country, in April 2011 the then prime minister Yousaf Raza Gilani imposed moratorium on provision of new industrial and commercial gas connections across the country with immediate effect for a period of six months.

Subsequently, while considering another summary by the Petroleum Division, Gilani directed to further extend the moratorium in September 2011 but allowed gas connection to the commercial and industrial sector in Balochistan.

The moratorium in rest of the country was, however subject to the caveat moratorium imposed on new commercial and industrial connections had been extended for one year except for those who had paid the connection charges and security deposit or deposited 100 per cent cost of line pipe to be laid form them.

The moratorium was not applicable for the province of Balochistan. However, for industrial connections, the minister for petroleum and natural resources was allowed to decide on case to case basis. This meant that moratorium was not applicable for provisions of industrial and commercial connections based on indigenous gas in Balochistan, however, approving authority for industrial connections rested with the minister for petroleum division.

The 2011 moratorium was imposed on the premise that natural gas demand supply gap was widening mainly due to depletion of existing resources, increase in demand due to new consumers, and disproportionate addition of new gas resources to the national grid.

It was reported at the time that demand supply gap of 1.6 billion cubic feet per day (bcfd) in 2011 would increase to around 3bcfd in 2015 and this would further rise to 5.3bcfd by 2020.

Published in Dawn, January 9th, 2021