Salman Khan
Salman Khan

ISLAMABAD: With gas shortfall estimated to peak closer to one billion cubic feet per day in January, the ministry of energy on Thursday reported the power sector circular debt at Rs2.419 trillion at the end of October, rising at the rate of about Rs35 billion per month.

This was the crux of a meeting of the Cabinet Committee on Energy (CCoE) presided over by Minister for Planning, Development, and Special Initiatives Asad Umar.

An official statement said the petroleum division of the energy ministry presented projected natural gas supply and different policy options for the management of gas supply from the management side for the winter months — December 2021 through March 2022.

The meeting was informed about the efforts to enhance the natural gas supply. The CCoE directed the petroleum division to ensure maximum supply while ensuring implementation of a demand management plan as already approved by the Cabinet.

Non-export general industry to be provided gas on the basis of weekly rotation

After analysis of demand and supply situation, including domestic gas production and LNG imports, the overall gas shortage in December was estimated at about 720 million cubic feet per day peaking to 970mmcfd in January and the coming down to 640mmcfd in February. To overcome the shortfall in energy supply chain, particularly in the power sector, the furnace oil requirement was estimated about 170,000 tonnes in December, 150,000 tonnes in January and about 55,000 tonnes in February. The meeting was informed that furnace oil availability in December would be around 140,000 tonnes and 90,000 tonnes in January and over 130,000 tonnes in February. That meant some power shortages could also be expected depending on demand growth as a result of cheaper seasonal and industrial support tariff.

It was decided that gas and RLNG would be supplied uninterrupted to export industry, including top 50 exporters, in addition to zero-rated industry, unless technical constraints emerge in the system like pressure problems. Supply of gas and RLNG to export-oriented captive power plants would be monitored till December 15 and then re-adjusted based on availability. CNG would remain closed until February 15.

The general industry (non-export) would be provided gas on the basis of weekly rotation, with one-day off, for each sector or zone. The cement sector would be treated on par with non-export general industry and complete closure would depend on supply review. Uninterrupted gas supply of about 757mmcfd would continue to the fertiliser sector to boost agriculture productivity. Fauji Fertiliser and Fauji bin Qasim would get 330mmcfd, Engro 203mmcfd, Fatima 147mmcfd, Pakarab 49mmcfd and Agritech 29mmcfd.

The power sector IPPs on dedicated arrangements worth 3,000mw would get uninterrupted gas supply but then these are based on non-pipeline quality gas which could not be transported. LNG-based power plants would be provided 5 per cent extra supply as compared to last year’s actual consumption.

It was decided that after meeting national requirements of gas for critical industries, “maximum efforts would be made to accommodate the domestic consumers on priority” and in case of extreme winter, gas curtailed from CNG, cement, general industry (non export) and captive plants of export industry would be diverted to domestic sector to ease political noise.

For space and water heating, the domestic consumers were being encouraged to fully utilise the seasonal electricity tariff of Rs12.96 per unit. Also, electricity package for export industry at the rate of 9 cents per unit had already been provided while gas tariff for export sector (captive plants) has been increased from $6.5 per million British Thermal Unit (MMBTU) to $9 to switch industry from gas to power grid.

Published in Dawn, December 3rd, 2021

Now you can follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Losing grip
Updated 29 Jan, 2023

Losing grip

The state and the government are responsible for providing Imran with the security he deserves as a former prime minister.
Telling silence
Updated 29 Jan, 2023

Telling silence

THE silence of the Sindh government over the recent exposé in this paper about Karachi’s water tanker mafia ...
Palestine escalation
29 Jan, 2023

Palestine escalation

THE fire of conflict once again threatens to envelop the land of Palestine, as the growing cycle of violence refuses...
IMF package
Updated 28 Jan, 2023

IMF package

While it is crucial to seek immediate IMF funding to shore up its reserves, the govt shouldn’t focus only on short-term relief.
Dar unpegged
28 Jan, 2023

Dar unpegged

IT is over. Nearly four months after Ishaq Dar descended on the cash-strapped economy with some decidedly outlandish...
Lurking hazards
28 Jan, 2023

Lurking hazards

OVERSIGHT of illegal industrial activity occurring within residential areas in the country is weak, especially in...