ISLAMABAD: The Compressed Natural Gas (CNG) as well as captive power plants (CPPs) may face a shortage of gas in the near future as the petroleum division has been mulling to ensure supply to the export oriented sector and domestic consumers during winter.
A meeting of the Cabinet Committee on Energy (CCoE) in this regard was held here under the chairmanship of the Federal Minister for Planning, Development, and Special Initiatives Asad Umar on Thursday.
As per details, the petroleum division presented the projected natural gas supply and demand position in the country for the coming winter months during the meeting as well as a detailed impact analysis of different policy options for the management of gas demand during winter 2021-22 (FY22).
The meeting was informed that the enhanced demand of domestic consumers is to be met through savings from captive power generation wheres a prudent pressure management plan will also be developed to ensure stable supply to the residential sector.
It was further informed that although supply to CNG will have to be curtailed, industrial activity, especially export activities, will be a focus in the gas management plans.
The CCoE approved the demand side of the proposals submitted by the petroleum division and informed that it would consider supply side proposals in the next meeting.
Furthermore, the CCoE also considered the summary presented by the Maritime Affairs Division on the construction of an oil storage unit at Oil Installation Area Keamari.
The meeting was informed that insufficient storage infrastructure at the ports creates a bottleneck in the supply chain and results in increased costs. To comprehensively review the situation and available options, the CCoE formed a sub-committee under SAPM on CPEC Khalid Mansor including member Energy Planning Commission, secretary Petroleum, and secretary Power. The sub-committee will submit its proposals to the CCOE within two weeks.
The committee also reviewed the monthly report submitted by the power division on the out of merit power plant operations due to network constraints. It was assured that a constraint removal plan for the encountered issues is already under implementation.
It is pertinent to mention here that the CCoE remained indecisive on the Oil Refinery Policy, 2021, noting that a summary regarding deemed duty had already been tabled in the last meeting. Therefore, it preferred to stay away from taking any decision in this regard.
The petroleum division had earlier linked 10 per cent tariff protection for existing refineries on motor gasoline and diesel with the construction of up-gradation projects before December 31, 2025, in the new oil refinery policy.
The energy ministry has been preparing a summary again with some changes such as incentives being capped at 30pc instead of the previous 40pc of the project cost.
