With the gas shortfall expected to increase to 2 billion cubic feet per day (bcfd) in the upcoming winter season, the government has decided to cut gas supplies to the industrial consumers for the three month period between December and February to meet the rise in demand of domestic consumers.
New gas load management plan
An official source said the Ministry of Petroleum is giving final touches to the new gas load management plan which will be considered for approval by the Economic Coordination Committee of the cabinet (ECC) in its next meeting. He said that proper management based on the demand of gas will be very difficult in winters if the government did not take a firm decision the system might choke all together as the gas transmission network, especially in Punjab, is working under extremely tight conditions.
CNG, fertiliser sector to benefit
Considering the precarious gas supply situation, he said, the Petroleum Ministry has decided to implement gas supply to the industrial consumers as per their agreement of 9 months. They could use alternate fuels for their requirements during the winter season. The industrial sector uses approximately 750 mmcfd of gas. During the last two years, the influential industrial sector had managed to get gas supply for the whole year. The government is under immense pressure from the CNG and fertiliser sectors for equitable load management across the board. CNG sector uses 7 per cent share in the gas supply while the general industries utilise 29 per cent. Fertiliser sector has been claiming that it was subjected to 55 per cent gas curtailment as against 40 per cent or less curtailment of other sectors.
CNG sector saves $2.6b in oil costs
The government is in no position to increase the load shedding for the CNG sector as they could launch a protest campaign. ECC will be deciding the issue of allocation of the available gas to fertiliser or power sector. More than 3.5 million vehicles ply on CNG in the country. It also helps in an annual saving of $2.6 billion by the lowering of the petroleum imports by 3.8 billion litres per annum. CNG association claims that the two days load shedding in Punjab alone causes an additional burden of Rs42 billion per annum on the consumers. When asked on linking the discovered 400 mmcfd gas reserves, he said that 250 mmcfd gas will be injected in the national transmission network during the winter season. About 100 mmcfd from Kunnar Pashaki will be linked to the system by December, while 20 mmcfd of tight gas discovered by a Polish firm in Balochistan and 100 mmcfd from Latif and Sarwan will be injected in the transmission network during the winter season.
Economic cost of gas allocation
According to an official study on economic value of natural gas, the contribution of natural gas, in terms of GDP output, is highest in the power sector. This, coupled with the high cost of the alternative fuel, implies that the power sector should be given higher priority for gas supply. Within the power sector, the economic value of natural gas is higher when it is used to replace high speed diesel (HSD) in comparison to furnace oil (FO). The value addition of the industrial sector is the second highest. However, the economic value of gas in the industrial sector in comparison to other sectors is comparatively lower due to the lower cost of alternatives. Thus, gas for heating and boiler usage should be supplied only to those industries which are either non-switchable or have highly efficient processes, such as cogeneration.
Value addition to fertiliser sector
The value addition through the fertiliser sector is relatively low in comparison to the value addition through the power and industrial sectors. However, the economic value of natural gas is high for existing plants and therefore, the supply of gas to these plants should be continued. Additional urea demand should be met through the import of urea instead of allocating gas to new plants. The economic value of gas in the transportation sector is high, but the contribution of the natural gas to GDP through the transportation sector is insignificant.
rest of the months are not officially included into it………)))
That means industries will be closed during these months isn't it true?
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