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ISLAMABAD: Constitutional rights of those provinces where gas is produced would be violated with implementation of the Oil and Gas Regulatory Authority (OGRA) (Amendment) Act 2022, designed to recover the full cost of imported LNG from consumers nationwide.

This was the crux of the argument put forth in the court by the Sindh government after the Khan administration passed the Act which stipulates that “the purpose of the amendment is to bring entire LNG/RLNG licensing and pricing under regulatory framework. This shall also empower the OGRA to determine and notify the RLNG sale price under the OGRA Ordinance, 2002”.

The complete implementation of WACOG has been pending since stay order of Sindh High Court against the Act in March 2022 in which the provincial government is also a party, an official of petroleum division told Business Recorder.

Ogra gas tariff hike notification lawful: SHC

Sindh government is clamouring for what it claims are the constitutional rights of the people of Sindh for priority over utilization of natural gas from the wellheads located in the province, in pursuance of Article 158 of the Constitution of Pakistan, be safeguarded in letter and spirit.

Advocate Supreme Court Hafiz Ahsan Khokhar told this correspondent that the law is pending implementation before the Sindh High Court adding that this is unusual as the courts generally do not like a challenge to laws passed by Parliament.

A former Member (OGRA) and Advocate Muhammad Arif told Business Recorder that the OGRA Act was notified in March 2022, but its complete execution has yet to materialize. He said gas companies had given the task to implement the Act in phases instead of the federal government taking any executive decision.

On April 16, 2024, Prime Minister Shehbaz Sharif formed a committee to deliberate on import of LNG and fixation of WACOG as per implementation of Article 158 and Article 154(3) of the Constitution of Pakistan.

However, only one meeting of the committee has so far been held, sources said.

The committee members include Minister for Petroleum, Minister for Power, Minister for Industries and chief Secretaries from Punjab, Sindh, Khyber Pakhtunkhwa, and Balochistan.

The federal government is implementing the WACOG bill in phases, starting with industries before extending it to the domestic sector. Gas companies have been directed to provide industries blended RLNG during winter to avoid gas shortage to domestic consumers.

Punjab consumes the most gas but produces very little. Other provinces have therefore opposed a uniform pricing regime, claiming that such a mechanism would unfairly benefit Punjab.

Sindh produces between 2,500-2,600mmcfd natural gas and the quota of SSGCL for its two franchise provinces i.e. Sindh and Balochistan varies between 1,200-1,300mmcfd. Sindh currently receives an average of 900-1,000mmcfd of natural gas against its constitutional right of 2,500-2,600mmcfd, an official of Petroleum Division said.

In the ÍMF’s second and final review under the Stand-By Arrangement, Pakistan intends to move toward fully implementing WACOG across Pakistan, defined as introducing a uniform gas price throughout the country to ensure full cost recovery.

With no major gas discoveries in the last decades and an average depletion rate of 11 percent per year, Pakistan has become a net importer of LNG.

The circular debt of gas sector had reached Rs 3.2 trillion till January 2024. Both gas companies – Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) have been diverting RLNG to domestic consumers in winters at ring fence pricing.

Copyright Business Recorder, 2024


Comments are closed.

Maqbool May 24, 2024 12:12pm
@KU, officials = retired with full benefits and pensions ?
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fahad May 24, 2024 05:13pm
Punjab does not pay tax, they dont even want to pay the gas price, there is load shedding of gas in karachi sindh, to provide gas in punjab.
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fahad May 24, 2024 05:13pm
irony is that chief minister punjab has allowed new connections in punjab on the first day of her tenure. This is not Pakistan it is Punjabistan.
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