SIFC okays new gas allocation merit order

ISLAMABAD: The government has decided to change the gas merit order for gas allocation with domestic, commercial including roti tandoor and industry for processing purposes with priority at the top.

“The Special Investment Facilitation Council (SIFC) to this effect has approved the changes in the gas merit order. Right now the Petroleum Division has made the summary which is in circulation with various ministries and stakeholders for their comments and will soon be pitched in the ECC for approval,” a senior official of the Energy Ministry told The News.

The Apex Committee of the SIFC, he said, headed by the prime minister and attended by the Chief of Army Staff (COAS), has approved in its 9th meeting the changes in the gas allocation merit order.

He said, “The SIFC has approved new merit with top priority for gas allocation to domestic, and, commercial including roti tandoor and industry for processing mainly to stimulate the economic activities with a certain momentum and maintain it for the whole year. We have done away with the difference between export and non-export industries and equalised them with equal gas tariffs.”

“It has been the long-standing demand of the industrial sector to put it on the top of the gas priority allocation list which the SIFC has approved.”

The domestic sector, he said, will also stay at the top with 8 hours of gas availability depending upon the RLNG availability and its payment mechanism to the entities at the receiving end such as PSO (Pakistan State Oil).

“The government has also decided to put under the new merit order the power and fertilizer sectors second on the altered gas priority list for the gas allocation and industry for captive power plants at third, cement at fourth, and CNG at fifth.”

At present the domestic and commercial sectors are at the top of the gas merit list and then comes the power and export sectors at second. General industry and captive power are third, cement at fourth and CNG is at last about the allocation of the gas.

The official said that the LNG diversion to the domestic sector also needs to be limited as in the ongoing winter season SNGPL alone has diverted 19 LNG cargoes to the domestic sector.

In the future, there is a dire need to limit the diversion of LNG cargoes to 10-12 in numbers to decrease the gas availability to the domestic sector for six hours during cooking time. This will help the government to curtail the circular debt piled up in the wake of the non-recovery of the cost of the RLNG.