Senate Passes WACOG Bill to bail out PSO, SNGPL
Pakistan State Oil and Sui Northern Gas Pipeline Limited (SNGPL) will enjoy some relief after Senate passes the weighted average cost of gas (WACOG) bill to reduce circular debt.
At present, PSO and SNGPL are facing mounting circular debt due to diverting LNG towards domestic consumers to overcome the gas crisis.
The major beneficiary of this bill will be Punjab province whose shares in indigenous gas production were lower compared to other provinces. It is consuming LNG, especially in all commercial sectors like CNG, textile, and fertilizer.
Now, the Parliament had empowered the government to take the weighted average cost of indigenous and imported gas to reduce the burden of the high price of imported gas on certain sectors and reduce circular debt.
The Senate on Thursday okayed the weighted average cost of gas (WACOG) Bill to sell LNG at a mixed price with indigenous gas.
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Minister for Energy Hammad Azhar informed on social media through his official Twitter account.
WACOG bill has been passed today by senate as well. It is a historic and long pending reform that will ensure the energy security of Pakistan. We are now able to embark upon the reform of the gas pricing structure, remove anamolies and enhance supplies of imported gas. 1/2
— Hammad Azhar (@Hammad_Azhar) February 17, 2022
He said the upper house of the parliament had passed WACOG bill.
Energy Minister termed it as a historic and long-pending reform to ensure the energy security of Pakistan.
He said that the government had now embarked upon the reform of the gas pricing structure.
It will remove anomalies and enhance supplies of imported gas.
Earlier, Energy Minister had claimed the government evolved consensus on WACOG.
LNG share in Supply
According to the energy minister, the ratio of indigenous gas and LNG import was 70:30. It will change to 50:50 in two years.
Moreover, he said that weighted average cost was important as the share of the LNG would increase to 80-90 % in a few years.
The total local gas allocation had declined to 3500mmcfd following depletion of 9% from local gas fields.
Besides, WACOG bill, the Senate on Thursday also unanimously passed the Oil and Gas Regulatory Authority (Amendment) Bill, 2022, the Oil and Gas Regulatory Authority (Second) Amendment Bill, 2022, and the Allied Health Professionals Council Bill, 2022.
