ISLAMABAD: The Transparency International Pakistan (TIP) has asked Prime Minister Shehbaz Sharif to investigate a complaint against KE according to which the utility company charged electricity at Rs35 per unit against Rs17.5 per unit due to SSGC’s violation of the gas priority list.
Profit has learnt that TIP has written a letter to PM Shahbaz Sharif with regard to a complaint it received against KE charging more due to Sui Southern Gas Company’s (SSGC) violation of the Gas Priority List notified by the Ministry of Energy in 2018. The letter states that the utility company stopped supplying natural gas to KE from October 2021 in connivance with the owners of Captive Power Plants (CPPs) which means that those who receive their electric bills from KE are being charged an additional PKR 131 billion annually.
The notification in question states that according to the Natural Gas Allocation and Management Policy 2005-Revision in the priority order, domestic and commercial consumers are supposed to get natural gas on first priority, power sector on second, general industrial, fertiliser and captive power on third, cement sector including its CPPs on the forth and the CNG sector on the fifth.
However, SSGC, without any approval from the Ministry of Energy or Cabinet, put CPPs on second priority and eliminated the power sector from the list altogether. Instead, KE is being supplied RLNG w.e.f. October 2021. This costs PKR 4,656/MMBTU whereas natural gas is for PKR 857/MMBTU.
TIP’s letter states that SSGC is supplying a total of 210 MMCFD natural gas to captive power plants at the rate of PKR 857/MMBTU and PKR1,087/MMBTU to captive general industries which is at third priority order, while the power sector which is supposed to be on second priority is supplied 70 MMCFD expensive RLNG at the rate of PKR4,656/MMBTU instead of natural gas in violation the priority list.
Currently, due to power generation using RLNG, electricity consumers are compelled to pay approximately PKR 17.5/unit additional charges including taxes, FCA and line losses compared to power that is being generated through natural gas. This means that if a consumer consumes 500 units a month on average, 2.5 million consumers are paying approximately PKR 131 billion extra per year.
According to a letter that the utility company’s sent to KE on April 23, 2018, the company was to manage the load according to available volumes which is currently up to 130 MMCFD maximum natural gas for power generation carried out by K-Electric. Any additional volumes required by KE over and above these volumes will be met through RLNG.
Another issue pointed out by TIP is that export industries in Punjab are supplied RLNG at USD 9/MMBTU which is PKR 1,980/MMBTU (at PKR 220 conversion rate), whereas industries in Karachi are supplied natural gas at PKR 857/MMBTU, which is a big revenue loss.
This too has been going on in connivance with the owners of the export industry and SSGCL, the corruption watchdog said in the letter.
Based on the authenticity of the submitted documents, it appears that prima facie SSGCL is violating the gas priority list, the price of which is being paid by consumers of the Karachi Electric, the letter adds.
Transparency International Pakistan requests the prime minister of Pakistan to investigate the complaint, and direct the concerned authorities to ensure the implementation of the Gas Priority List notified in 2018 as per the decision of Federal Cabinet Committee on Energy, and ensure that SSGCL provides 130 MMCFD natural gas to power plants so that cheaper electricity is produced for consumers in Karachi. The Prime Minister is also requested to address the discrimination of supplying RLNG and Natural Gas supply to the export industries of Punjab and the export industry of Karachi which is also causing huge losses to the government of Pakistan, the letter concludes.
Growing electricity cost is becoming problem for every citizen of Karachi. PM need to step in and provide some solution. Much needed!
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