Monitoring Report
ISLAMABAD:
The coalition government in order to control worsening gas crisis in the country is all set to disconnect supply of indigenous gas to the commercial consumers that include hotel industry, malls, bakeries, cinema, theatre, clubs etc with the start of November.
Sui Northern Gas Pipelines Limited (SNGPL), in a letter has been informing to its commercial consumers that the supply of indigenous gas to the commercial consumers 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 who will sign RLNG supply contract prior to 31st October, 2022.
The 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.
According to industry sources, 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.
Available copy of SNGPL letter said that 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.
Oil & Gas Regulatory Authority’s “State of the Regulated Petroleum Industry” Report for fiscal year 2020-21 disclosed that 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.
