For RLNG used by domestic consumers: CNG, fertilizers, industrial, power sectors to pay Rs78b

ISLAMABAD: The government has decided to pass the burden of Rs78 billion to RLNG consumers for the imported gas that was used by domestic and commercial sectors in the last two winter seasons of 2018-19 and 2019-20.

However, OGRA will appoint the auditor to ascertain whether Rs78 billion cost incurred on imported product is right or not that was used by the domestic consumers of Sui Northern Gas Private Limited (SNGPL) in the last two winter seasons.

SNGPL worked out diversion of the volume of RLNG to the domestic and commercial consumers in last two winter seasons of 2018-19 and 2019-20. In the month of December 2018, 209mmcfd RLNG is diverted to domestic and commercial sectors, in January 2019, 367mmcfd, in February 2019, 324mmcfd and in March 2019, 186mmcfd RLNG was diverted. And for 2019-20, the said gas company diverted the 138mmcfd RLNG to domestic and commercial consumers in month of November 2019, and in December 2019, 266mmcfd RLNG is diverted, in January 2020, 472mmcfd, in February 2020, 386mmcfd and in March 2020, 130mmcfd RLNG.

Once Ogra gets the price of the RLNG used by residential and commercial consumers of SNGPL audited, then it will be passed on to the RLNG consumers which include CNG, fertilizers, industrial (captive power plants) and power sector (RLNG based power plants).

ECC (Economic Coordination Committee) that met here on Wednesday has also decided to divert the RLNG to residential consumers of SNGPL for the winter season 2020-21 starting from November 1, 2020. This time because of the massive shortfall of gas, the government will divert the RLNG of 1.345bcf (billion cubic feet) valuing over Rs60 billion to domestic sector of the Sui Northern in a big way.

As per the plan, in the month of November, the RLNG of 150mmcfd will be diverted to the commercial and domestic sectors, which will surge up to 300-400mmcfd in the month of December, 2020. However, a huge spike in RLNG usage by domestic and commercial sectors has been estimated at 670mmcfd, which may increase up to 700mmcfd in the month of January 2021. After January, the consumption of gas will start tumbling owing to which the usage of RLNG will shrink to 70mmcfd in February that will further dwindle to 15mmcfd in the month of March.

About the gas loadshedding in the winter season, the official said that CNG, fertilizers and industrial sectors will suffer the most as major portion of RLNG will be diverted to commercial and residential consumers of Sui Northern. In the system of Sui Northern, the gas deficit of 700-1000mmcfd has been estimated while in the system of Sui Southern, the shortfall will be hovering between 360-500mmcfd.

To a question, the official said that Ogra cannot charge the cost of RLNG from domestic consumers as their tariff does not include the RLNG as gas product in the tariff. The RLNG is by definition a petroleum product so the cost of RLNG can be charged from RLNG consumers and more importantly, the cost of RLNG is totally ring fenced so it cannot only be charged by not the commercial and domestic consumers.

The recovery of the huge amount of Sui Northern from domestic consumers is not possible as the tariff of this category of consumers is different and at lower side. However, the non-recovery of a huge amount of Rs78 billion has multiplied the financial miseries of Sui Northern and because of this very issue, Sui Northern has defaulted the payments of Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL). And because of non-payment by Sui Northern, the PSO has already defaulted in payments of the international LNG supplies twice in the recent past.