Sindh refuses to buy expensive gas

CM Murad asks PM Imran to direct Petroleum Division to desist from including RLNG into existing WACOG formula

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ISLAMABAD: The Sindh government has refused to purchase expensive gas from the centre and has told Prime Minister Imran Khan that the province has been receiving less gas in comparison to its production.

Sindh Chief Minister Syed Murad Ali Shah, in a letter to the prime minister dated January 8, has requested that Special Assistant to the Prime Minister on Petroleum Nadeem Babar should be stopped from any attempt to include Re-Gasified Natural Gas (RLNG) into existing Weighted Average Cost of Gas (WACOG) formula for indigenous natural gas for tariff determination and to ensure supply of locally-produced natural gas to consumers in Sindh as per demand and as per their constitutional right.  He said that Sindh has been producing more gas than what it has been receiving as a share while as per the Constitution, it has the first right to use that gas which it has been producing. Moreover, it is beyond common sense that Sindh should buy expensive gas when it has been producing cheaper gas, he added.

“Your personal attention to this matter of national importance shall be highly appreciated,” the chief minister said.

CM Murad also apprised the premier that province has been producing between 2,500-2,600 MMCFD [million cubic feet per day] natural gas and the quota of Sui Southern Gas Company Limited (SSGCL) for its franchised province i.e. Sindh and Balochistan varies between 1,200-1,300 MMCFD. He said that Sindh has currently been receiving on an average 900-1,000 MMCFD natural gas against its constitutional right of 2,500-2,600 MMCFD.  He also said that it defies even common sense that the people of Sindh, on the one hand, are deprived of its constitutional share of 2,600 MMCFD at Rs520.54 per MMBTU while on the other hand, are also being asked to buy it at Rs1,690 per Million British Thermal Unit (MMBTU).

The chief minister also raised serious objections on Babar’s claim that he has agreed to the inclusion of RLNG in the WACOG formula of local natural gas in the last meeting of the Council of Common Interests (CCI). He said that this claim was very disturbing and had created unrest amongst the people of Sindh as this news was carried in the national press.

“The special assistant to prime minister, Ministry of Energy (Power Division) may be directed to immediately issue a clarification in the press accordingly,” CM Murad’s letter read.

CM Murad also said that the federal government has time and again assured the provincial government that import of RLNG would solely be for Tier-II category of natural gas consumers under ring-fenced tariff arrangements and existing Tier-I consumer of natural gas, under WACOG-based tariff, shall not bear the burden of the high cost of imported RLNG. Any federal government attempt to work out natural gas tariff by including RLNG into existing WACOG of indigenously produced natural gas is a gravely disturbing, upsetting and illegal proposal, he added. He further said that Sindh is the largest producer of natural gas in the country and its consumers shall not be burdened with the high cost of RLNG.

Perturbed with Babar’s claim with respect to analogising wheat production of Punjab with oil and gas production, the chief minister said this is a “ridiculous, highly incorrect, misleading and irresponsible” claim, which is contrary to the facts and misinformation for citizens of Pakistan. He said that the distribution of natural gas has been governed by Article 158 of the Constitution. This is analogous to grant of hydel profits to the provinces of Khyber Pakhtunkhwa (KP) and Punjab based on Article 161 (2) of the Constitution, he added.

It is pertinent to mention here that the notified price of RLNG for the month of December 2019, was $10.8349 per MMBTU i.e. Rs1,690 per MMBTU against the WACOG of Rs520.54 per MMBTU for indigenous gas.

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