ECC Approves To Put Rs22B Burden on Gas Consumers
The government has decided to pass on Rs 22 billion burden on the consumers on account of RLNG supply to Power Plants.
Power division had sought the approval of economic coordination committee (ECC) to issue a policy guideline under Section 21 of the OGRA Ordinance, 2002, enabling the OGRA to incorporate the Cabinet-approved adjustment of Rs. 21.9 billion into cost of supply of RLNG. It will be subject to the verification of the Auditors.
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Sources said that economic decision making body has approved the proposal with the stipulation that policy guidelines shall be issued under Section 21 of the OGRA Ordinance, 2002, enabling the OGRA to incorporate Rs. 21.9 billion, approved by the Federal Cabinet, subject to verification of the Auditors, which may be apportioned/adjusted into the cost of supply of RLNG & Gas.
The Ministry of Energy (Power Division) had shared with the ECC that the Federal Cabinet had approved the waiver of Late Payment Interest (LPI) amounting to Rs. 68.6 billion in the books of SNGPL.
They pertained to RLNG supplies to NPPMCL-Haveli Bahadur Shah, NPPMCL-Balloki, Quaid-e-Azam Thermal, and Nandipur Power Plant.
Furthermore, the Task Force resolved the longstanding dispute between the GPPs and SNGPL of the originally agreed 66% minimum Take-or-Pay arrangement for RLNG supplies, which was reduced by ECC on January 11, 2023, to 0% for Quaid-e-Azam Thermal (Pvt.) Ltd., and to 33% for Haveli Bahadur Shah and Balloki Power Plants.
This was resolved in favour of SNGPL, in the larger interest of gas consumers, by maintaining it at 66% till December 31, 2024, and to 50% thereafter with clear agreement between SNGPL and GPPs on the calculation mechanism.
The additional financial impact of Rs. 21.9 billion, subject to auditor verification, was also approved by the Cabinet in the aforementioned decision. It was informed to the Task Force accordingly.
In the pricing mechanism for “System Gas” and “RLNG” operated under separate sales revenues and policy frameworks defined by the Federal Government.
However, the Task Force had recommended that the verified Heat Value Pay proceeds be credited to RLNG sales revenues to offset and reduce the RLNG cost for consumers.
To give effect to the above adjustment within the RLNG cost of service structure, as determined under Section 43(1) of the OGRA Ordinance, 2002, it is imperative that the Federal Government issue a policy guideline under Section 21 of the said Ordinance, enabling the OGRA to incorporate the Cabinet-approved adjustment of Rs. 21.9 billion into the cost of supply of RLNG.
