Gas crisis

As the impending gas crisis is approaching fast with the intensifying winter, the government appears to be ill-prepared to avert or face it. According to reports, the government is planning to provide gas to the residential sector only three times a day as the bare minimum supply of liquefied natural gas (LNG) will compel the authorities to do this. In the coming months, especially from December through March, the country is likely to face an immense shortage of gas across the country. The Gas Load Management Plan for winter 2021-22 seems to be in doldrums as the Cabinet Committee on Energy (CCoE) is still pondering over how to tackle the issue. The recently held meeting of the CCoE could not come up with any other effective measures apart from deciding that “gas to the residential sector shall be provided three times a day for cooking only”. This was the recommendation by the Ministry of Energy (Petroleum Division) which says that RLNG diversion to domestic consumers will be made at bare minimum in view of the limited operational ability of the system to cope with the crisis.

There are a couple of questions that need answers. First, despite repeated reports in the media, why was lower LNG availability in the coming months not foreseen? Everyone knows that in winter all sectors need more than usual supply of fuel. Particularly, the months from December to March always have a higher demand for energy. The concerned authorities have displayed relatively inadequate preparation for such deficits against the demand based on clear indications. If the government ends up managing this issue at the ‘bare minimum’, the consumers have a right to ask why this negligence was committed in the first place. Total shortfalls in December are likely to be 22 million cubic feet per day (mmcfd). This shortfall would increase to a staggering 137mmcfd in January and then decline to 75mmcfd in February and March.

The decision of the government to supply gas to the so-called ‘dedicated’ consumers such as the power and fertilizer sectors will put the domestic sector in a hard situation. Since this will be done on an independent system outside the national pipeline network, the supply to the power and fertilizer sectors is likely to remain stable, if we are to believe the government that no unforeseen eventuality will emerge in the coming months for these sectors. For them the demand would remain unchanged and range between 1,000 and 1,200 million cubic feet. If you compare this demand with that of the domestic sector, you find that residential consumers are already at a bare minimum, and facing gas shortages even for cooking purposes. In the pipeline network, power plants on the SNGPL system will be provided RLNG as per the actual consumption of winter of last year with five percent more supplies; and any deficit is likely to be compensated through furnace oil. With the rapidly depreciating value of the rupee, the government will end up paying much more than it did just a couple of months back. The government is planning to facilitate fertilizer plants on both the SSGC and SNGPL systems so that they can operate uninterrupted. Sacrificing the domestic and industrial sectors at the altar of the fertilizer and power sectors is not an ideal situation. The PM must take notice of this situation and take steps to ameliorate the problems domestic and industrial gas consumers are facing. Those who are responsible for this sorry state of gas affairs must be taken to task.