ISLAMABAD: Transparency International-Pakistan (TI-P) has sought Prime Minister’s intervention for supply of indigenous gas to Karachi-Electric (KE) as per priority list, aimed at reducing tariff of consumers.
A letter to Prime Minister, Shehbaz Sharif, signed by TI-P, Chairperson Yasmeen Lari and Vice Chair Justice NasiraIqbal (retired) said that TI-P has received a complaint against KE charging electricity at Rs 35/ unit (including taxes, FCA, line losses) against Rs 17.5/unit (including taxes, FCA, line losses) due to M/s SSGCL violation of Gas Priority List notified in 2018 by Ministry of Energy by stopping Natural Gas to KE from October 2021 in connivance with owners of Captive Power Plants, which is costing an additional approx. Rs. 131 billion annually to KE consumers.
According to Petroleum Division’s notification of October 15, 2018, power sector has second priority and Captive Power Plants third priority.
However, M/s SSGCL without any approval of Ministry of Energy/ Cabinet changed the priority of Captive Power to second, eliminated power sector, and instead KE is being supplied RLNG from October 2021 at Rs 4,656/MMTBU whereas natural gas rate is Rs. 857/ MMBTU.
The letter says that SSGC is supplying a total of 210 MMCFD natural gas to captive power plants at the rate of Rs 857/MMBTU and Rs. 1087/ MMBTU to captive general industries which is at third priority order, while the power sector which is at the second priority order is being supplied 70 MMCFD of expensive RLNG at the rate of Rs. 4,656/MMBTU instead of natural gas thereby violating the gas priority list. Currently, due to power generation on RLNG, the electricity consumers are compelled to pay Rs. 17.5/unit (approx.) additional electricity charges (including all taxes, FCA and line losses) compared to electricity generation on natural gas, which means that if a user consumes on average 500 unit/month, then 2.5 million consumers are paying approximately Rs. 131 billion extra each year in the consumption of electricity.
According to SSGCL letter of April23, 2018, the gas utility manages the load according to the available volumes, which is currently up to 130 MMCFD maximum natural gas for power generation to K-Electric. Any additional volumes required by K-Electric over and above these volumes will be met through RLNG.
Another discriminatory issue is that the export industries in Punjab are being supplied RLNG at USD 9/ MMBTU which is Rs. 1980/MMBTU (at Rs. 220 conversion rate), whereas the export industries in Karachi are supplied Natural Gas at Rs 857/ MMBTU which is a big revenue loss, and this is in connivance with the owners of the export industry and M/s SSGCL.
TI-P argues that based on the authenticity of the submitted documents, prima facie, it appears that SSGC is violating Gas Priority List notified in 2018 which is costing Rs 35/unit electricity to consumers of KE, and supplying Natural Gas to Captive Power Plants which stands third in priority order. SSGC is only supplying expensive RLNG instead of Natural Gas to the power plants i.e. KE has increased the cost of electricity making it very difficult for the consumers of Karachi.
TI-P has requested the Prime Minister to investigate the complaint, and direct the concerned authorities to ensure the implementation of Gas Priority List notified in 2018 as per the decision of Federal Cabinet Committee on Energy, and ensure that SSGC provides 130 MMCFD natural gas to power plants, so that lower cost electricity may be produced for the end consumers. The Prime Minister is also requested to address the discrimination of supplying RLNG and Natural Gas supply to export industries of Punjab and export industry of Karachi which is also causing huge losses to the Government of Pakistan.
Copyright Business Recorder, 2022