In pursuance to the directions of the ECC, the Finance Division held a meeting on October 23, 2018 with M/o Energy (Petroleum Division), OGRA and SNGPL. Accordingly the meeting finalised the procedure for disbursement of subsidy on supply of system gas/RLNG to the zero rated industry, according to which SNGPL will invoice the zero-rated industry at notified prices and upon receipt of subsidy effective from date of the ECC decision of October 16, 2018 from Finance Division/GoP on monthly basis. The subsequent invoices to industry will be adjusted at ECC approved weighted average price of US $ 6.5 per MMBTU. Accordingly, based on actual consumption of RLNG/gas, the SNGPL will submit subsidy claims, duly signed by CFO SNGPL and verified by Secretary Petroleum, to Finance Division. The Finance Division will disburse the subsidy to SNGPL. The SNGPL will onward credit the actual amount of subsidy received to zero rated industry through immediate adjustment in the subsequent gas bills.
The sources said, previously, in view of electricity shortage, significant volume of gas was required to be consumed by the industrial sector for power generation, however, currently given the assured availability of electricity in the system, the subsidised gas is not required for power generation.
Accordingly, subsidised gas will be provided to zero-rated industry for production process purposes only while electricity will be available to the industry as per Government notified rates. The subsidy given by GoP during CFY will therefore be restricted up to 185 MMCFD (as per last year) with 10 percent variation in consumption.
Based on progress review of zero-rated industry during the period by the Government, onward continuity of subsidy and source will be explored in consultation with relevant stakeholders. With respect to notification of weighted average price of US $ 6.5 per MMBTU, Finance Ministry has conveyed to the Petroleum Division that it is decided that as subsidy on account of RLNG/system gas supply mix has to be reimbursed on monthly basis against notified gas prices as per actual consumption, therefore, the need for such notification of weighted average price does not arise.
Further, as system gas and RLNG pricing are being fixed under two sets of laws ie OGRA Ordinance, 2002 and Petroleum Levy Ordinance 1961 respectively, therefore, unless OGRA Ordinance, 2002 is amended to include RLNG, the OGRA under the present arrangement is unable to notify the weighted average price of US $ 6.5 per MMBTU for zero-rated industry, the sources added.