The Petroleum Ministry has put on ice its own proposal regarding increase in compressed natural gas (CNG) prices from next month after strong opposition by the Planning Commission and possible political ramifications, sources told Business Recorder here on Monday.
They said that the Ministry had made this suggestion as part of its summary on natural gas load management program for winter 2009-10 but with the Planning Commission's disagreement with these proposal on the grounds that they were anti-common man, it immediately retailored the summary for the Economic Co-ordination Committee (ECC) of the Cabinet, to be discussed on Tuesday.
The Planning Commission is also of the view that curtailment of gas supply, ranging between 282 and 468 mmcfd, would negatively affect industrial activity. The Commission proposed that reduced supply of gas to dual fired power generation plants (commitment on 9-month basis) should be considered as they can operate on oil during this period, sources said.
The cement sector, which is the lowest priority of the government, is likely to face complete disconnection during winter. In 2007-08, around 35 mmcfd gas was supplied to the cement industry (Energy Year Book 2009). This year, the cement sector is already on the lowest priority and is being supplied gas on 'as and when available' basis. "Halting gas supply to cement sector has already been proposed by the Petroleum Ministry," sources said.
Commenting on natural gas load management program for winter 2009-10, the Ministry of Water and Power said that generation from hydel power stations, particularly Tarbela and Mangla, remains on the lower side during winter months because of water management by Indus River System Authority (Irsa) to store water for wheat crop and annual canal closures. As such, Pakistan Electric Power Company (Pepco) has to rely on thermal power generation during winter months to minimise load shedding.
According to the Power Ministry, no alternative fuel consumption option is available at the two rented power plants at Sheikhupura and Bhiki. These plants will remain inoperative during the gas curtailment period. Besides, only two gas turbines, out of total eight GTs and GTPS, Faisalabad can be operated on alternative fuel ie HSD oil. In the absence of gas, six (numbers) GTS of 122 MW capacity will remain inoperable when gas is unavailable.
Ministry of Water and Power, therefore, has proposed that gas supply to GTPS Faisalabad and rental power plants at Sheikhupura and Bhikki in SNGPL system should be kept intact during winter of 2009-10 so that generation is not affected from the said power plants.
However, Petroleum Ministry has turned down the request of Water and Power Ministry with the arguments that in view of the projected shortfall, it would not be possible for SNGPL to supply gas to non-committee power sector including GTPS Faisalabad and rented power plants at Sheikhupura and Bhikki. Other plants, having 12 months gas supply agreement will continue to receive gas.
Sources said that Finance Ministry in its comments has suggested that Alternative Energy Development Board (AEDB) should be asked to initiate a pilot project for installation of solar water heaters, starting from government houses in Islamabad.
Finance has also proposed that the ECC should look into the option of banning new CNG stations for one year. In response to Finance Ministry's recommendations, Petroleum Ministry stated that issuance of licences for new CNG stations has already been banned, except for Balochistan. Further, moratorium on commissioning of new industrial and CNG connections during December, 2009 to February 2010 has also been proposed in the summary to be considered by the ECC.