Govt all set to disconnect supply of indigenous gas to commercial consumers from 1st November

ISLAMABAD: The coalition government in order to solve the expected severe gas crisis in the coming winter season is all set to stop supply of indigenous gas to hotel industry, shopping malls, bakeries, places of entertainment like cinema, theatre, clubs etc.

According to details, Sui Northern Gas Pipelines Limited (SNGPL) has been informing to its commercial consumers that the supply of indigenous gas to the commercial consumers has become not possible in the coming winter season owing to the severity of indigenous gas shortfall so the indigenous gas supply to them will be disconnected from 1st November 2022. However, SNGPL in order to ensure continuity of gas supply to the commercial consumers on Re-gasified Liquefied Natural Gas (RLNG) tariff has been offering RLNG supply to those commercial consumers only who will sign RLNG supply contract prior to 31st October, 2022.

It is relevant to note that tariff of indigenous gas for commercial consumers currently stands at Rs 1283 per Million British Thermal Unit (MMBTU) while Rs 3250/MMBTU is the tariff of imported gas (RLNG) for commercial consumers which is likely to go up in the future due to downward trend of the value of Pak currency against US dollar.
Sources in the industry said that the commercial consumers are avoiding signing the proposed contract sent by SNGPL to them and they are mulling to approach the court to get some relief in this regard. All cafes, bakeries, milk-shops, tea stalls, canteens, barber shops, laundries, hotels including hotel industry, malls, places of entertainment like cinemas, clubs, theatres, and private offices, corporate firms, owners of tandoors etc will be affected if SNGPL suspends supply of indigenous gas to them, sources added.

According to the available copy of SNGPL letter which it has been sending to its commercial consumers, the country is facing severe shortage of natural gas viz-a-viz increasing demand. The indigenous sources of gas are depleting. The demand supply situation is worsening due to an increase in consumption of gas especially in the northern side while an increase in consumption in central and southern Punjab is also expected in coming days, resulting in severe indigenous gas shortfall. All these factors have led us to the state of affairs where supply of indigenous gas to our valued commercial consumers effective from 1st November 2022, will not be possible for us, said SNGPL letter.

“We are fully aware that our valued commercial consumers may face hardships due to non-supply of natural gas during coming winter season. Accordingly, SNGPL is now offering RLNG to such commercial consumers only who sign the attached RLNG supply contract prior to 31-10-2022. Indigenous gas supply to all commercial consumers will be disconnected. Therefore, you are requested to sign and send contract before 31-10-2022 in order to ensure continuity of gas supply on RLNG tariff,” SNGPL letter reads.

It may be noted that we shall be constrained to disconnect supplies to your premises unless a contract for RLNG supply is signed and submitted before 31-10-2022, said SNGPL letter.

As per Oil & Gas Regulatory Authority’s “State of the Regulated Petroleum Industry” Report for fiscal year 2020-21, the indigenous gas production has declined by over six percent to 2,006 million cubic feet per day (MMCFD) while gas consumption increased by over five percent which reached to 3,884 MMCFD in the financial year (FY) 2020-21.

In F.Y. 2020-21 the indigenous gas production has declined by over 6 percent to 2,006 MMCFD from 2,138 MMCFD as compared to F.Y. 2019-20, whereas gas consumption has increased by over 5 percent which reaches to 3,884 MMCFD from 3,683 MMCFD, said OGRA’s State of the Regulated Petroleum Industry Report for fiscal year 2020-21.
OGRA’s report added that the main consumer of natural gas was power sector, consuming over 30 percent (1,305 MMCFD), followed by domestic sector with 20 percent (862 MMCFD), fertilizer 19 percent (829 MMCFD), General Industry 8 percent (365 MMCFD) and captive power 5 percent (203 MMCFD) of the total gas consumed during FY 2020-21.

Ahmad Ahmadani
Ahmad Ahmadani
The author is an investigative journalist. He can be reached at [email protected]

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