Circular Debt in Gas Sector Swells to Rs 1.3 Trillion
Government suspends gas supply to captive power plants (CPPs) due to rising circular debt in the gas sector
Islamabad: The circular debt in the gas sector has swelled to Rs 1.3 trillion, pushing the stating companies towards financial collapse.
Officials informed the Senate Standing Committee on Petroleum here on Thursday.
Petroleum secretary added government followed a policy to suspend gas supply to captive power generation due to rising circular debt worth Rs 1.3 trillion.
But as of the current situation, the ministry gave directives that every textile mill could get gas supply after an efficiency audit.
The Senate Standing Committee on Petroleum held a meeting with Senator Mohammad Abdul Qadir in the chair.
It directed the authorities to take all the stakeholders into confidence to launch a massive operation against the illegal connections.
The managing Director SSGC said that there were problems with gas connections in illegal buildings in Karachi.
Federal Minister for Energy, Hammad Azhar, said that there were 0.75 million illegal gas connections in Karachi.
Chairman OGRA remarked said that these illegal connections consumed 10 billion cubic feet of gas per annum annually.
He said they had brought this matter to the notice of Chief Minister Sindh.
The committee directed the authorities to take all the stakeholders into confidence to launch a crackdown against the illegal connections.
Senator Mohammad Abdul Qadir remarked that the gas shortage had added to the miseries of the people.
He called for collaborative efforts to provide relief to the masses.
Senator Mohsin Aziz pointed out the issue of the cutting off the gas supply to Textile Mills in Khyber Pakhtunkhwa without any prior notice.
Senator Sarfaraz Ahmed Bugti informed the Committee that up till now there was no gas in Sui.
Senator Afnan Ullah Khan drew attention to news reports about the decline in Pakistan exports due non-availability of gas.
The petroleum secretary responded owing to a decrease in domestic production and increase in demand government had to suspend supply.
LNG Import by Private Sector
About LNG import by the private sector, the Minister for Energy Hammad Azhar that PLL invited bids last month.
But unfortunately, not a single industry comes forward, he said.
The reason is why industries would import gas that cost them $40 per MMBtu, while the government supplied it at $6.5 per MMBtu, he added.
The government is also planning to give third parties access to LNG terminals, he further added.
Senator Afnan Ullah Khan asked the Minister about the present status of the CNG sector in the country.
Minister informed ministry had prepared a summary to give third party access to CNG Association to import LNG for itself.
Ministry will send to Cabinet for approval in next coming weeks and association was very satisfied with this initiative, he said.
Discussing details of the contract of PLL with SNGPL for the supply of LNG, officials apprised they completed 90% agreement.
They hoped to conclude in a month.
Officials of SNGPL and SSGC also briefed the Committee about a decrease in line losses under UFG 3 year reduction plan.
We reduced the line losses from 12% to single digit in this period and this gives benefit to Government of around 1 Billion rupees, officials said.
Oifficials informed there are more than 700,000 illegal gas connections in Karachi only.
The committee directed the authorities to take all the stakeholders into confidence to launch an anti-theft campaign.
