LAHORE: As the backlog of new gas connections continues rising, the Sui Northern Gas Pipelines Limited (SNGPL) may not be able to achieve its target of providing 300,000 connections — most of them domestic — to the consumers who have already paid fees.

The main reason, according to sources, is the ban, imposed by the government in December 2021, on new connections till March 2022 in a bid to maintaining gas supplies to domestic consumers in the winter.

“The backlog of new connections has now crossed the figure of 3.5m. The target, fixed by the company, for the ongoing fiscal year (FY 2021-22) is 300,000, which seems difficult to achieve due to the ban,” an official, requesting anonymity, explained to Dawn on Friday.

“The company would have only three months (till June 30, 2022) to achieve the target if the government lifts the moratorium next month,” he added.

The SNGPL had earlier asked the Oil & Gas Regulatory Authority (Ogra) to allow it spending Rs46.5bn on execution of several development schemes, including 300,000 new gas connections to domestic consumers during the fiscal year ending on June 30, 2022.

In its earlier estimated revenue requirement (ERR), the company had planned to provide 1.2m new connections during the FY22. However, later, through the review of estimated revenue requirement (RERR 2021-22) submitted to regulator in November, it decided to provide new connections to, at least, the consumers who have already paid requisite fees (including urgent cases). Those who have already paid fees were approximately 300,000. The estimated cost on providing 300,000 connections was Rs5.2bn.

“The ban on new connections (under merit order) is the first imposed by any government, as it never happened before keeping in view the years long wait by the applicants. The number of consumers seeking connections on urgent fee (Rs25,000) in addition to deposition of the routine fee/demand notice under a merit order is separate,” reveals another official source.

It may be mentioned that the SNGPL had earlier, in a briefing held in August, had told the participants that its regasified liquefied natural gas (RLNG) consumption had reached 55pc of the total supplies due to a massive decline in the indigenous supplies, resulting in more dependence on the RLNG. It also referred to the government’s plan of introducing the weighted average cost of gas (WACOG), which, the company claimed, would mitigate and reduce the high price of the RLNG for the public.

SNGPL Managing Director Ali J Hamdani told Dawn the discussion on the issue (new gas connections) is under way. “The ban on the new connections is not the issue and once it is lifted, we may achieve the target of installing 300,000 new connections,” he claimed.

Published in Dawn, February 5th, 2022