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The overall gas consumption during July-March 2013-14 has registered a negative growth, said Economic Survey of Pakistan. Sectoral analysis of the gas consumption indicates that during July-March 2013-14, the highest share of gas consumption was of power sector (26.1 per cent) followed by household (23.2 per cent) and industrial sector (21.7 per cent).
The Survey further revealed that during the current year gas consumption by fertilizer industry rose from 15.2 per cent to 19 per cent, while power sector consumption registered a decline from 27.5 per cent to 26.1 per cent, industrial sectors consumption also reduced from 22.6 per cent to 21.7 per cent, Compressed Natural gas Sector's gas consumption reduced to 7 per cent from 8.2 per cent, commercial from 3.3 to 3.1 per cent, while household gas consumption remained unchanged.
Pakistan is heavily dependent on gas with total potential gas reserves of 282 Trillion Cubic Feet (TCF) out of which a little over 24 TCF are recoverable reserves with current daily production of almost 4 Billion Cubic Feet per Day (BCFD). During 2013 total production remained 1,559 billion cubic feet that is equivalent to 32 million TOE - a growth of 6 percent when compared to last year in billion cubic feet while in TOE it shows a growth of 4.5 percent.
As the government accorded priority to provide gas to households, the share of households in gas consumption remained 23.2 percent. However, the trend of providing gas to power sector is declining since 2005-06 except in 2012 there was positive growth of 6 percent. The transport sectors which in past decade continually posted a positive growth in gas consumption registered a negative growth in the current year. Although its share in total consumption of gas has increased from 0.6 percent to 9 percent in last 10 years, now due to load management, its growth is declining and is 7 percent. The share of fertilizer sector has also declined, but its share is still significant (19 percent).
The worrisome factor is that Pakistan's local gas reserves are depleting and if gas consumption grows annually even at moderate rates, the present recoverable reserve will largely be exhausted by 2025. As this limit approaches the marginal cost of gas supplies will rise.
The government promoted use of Compressed Natural Gas (CNG) to reduce pollution and to improve the ambient air quality. During past few years, CNG Industry has observed a tremendous growth. At present, Pakistan is the world leading CNG user country with more than 3.5 million Natural Gas Vehicles (NGVs) plying on the roads. The choice of conversion is mainly due to the fact that price of CNG is significantly less than petrol price. Currently, more than 3,395 CNG stations are operational in the country. Liquefied Petroleum Gas (LPG) contributes to about less than one percent of country's total primary energy supply mix. Use of LPG as a domestic fuel is being encouraged. The government is trying to start import of Liquefied Natural Gas (LNG) to bridge widening gap between demand and supply, but failed to import LNG due to various reasons. Pakistan has huge coal reserves estimated at over 186 billion tons; including 175 billion tons identified at Thar coalfields. Pakistan's coal generally ranks from lignite to sub-bituminous, therefore, to cater to domestic demand almost 4 million tons of coal is imported.
Increasing demand of natural gas with its limited supply has made room for Liquefied Petroleum Gas (LPG) which is also a primary source of energy. Currently about 1000 tons/day LPG is being produced domestically contributing less than 1 percent to the total energy supply mix. Because of its characteristics LPG is fast becoming a fuel of choice in areas where natural gas distribution network is not available. The Oil and Gas Regulatory Authority (OGRA) is empowered to regulate the LPG sector under OGRA Ordinance 2002 and LPG (Production & Distribution) Rules 2001 from15th March, 2003. OGRA has simplified the procedure for grant of LPG license and the same is granted on fast track basis once the requirements are met/compiled.
During July-Dec, 2013 two licenses for construction of LPG storage and filling plants were issued. In addition, OGRA has also issued 15 licenses for construction of LPG auto refueling station. OGRA is playing a vital role to increase private investment on midstream and downstream petroleum industry. During July- December, 2013 an investment of Rs 0.264 billion has been made in LPG infrastructure whereas total investment in the sector till end of this fiscal year is estimated about Rs 17.464 billion.

Copyright Business Recorder, 2014

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