This was conveyed by Sagheer ul Hasan Khan Chief Financial Officer (CFO) of SNGPL to Director General Gas, Shahid Yousaf.
On December, 12, 2018, Ministry of Industries and Production had directed SNGPL that "Fatimafert and Agritech should be kept operational till January 31, 2019 on 100 percent RLNG; Gas/RLNG price for Fatimafert & Agritech has been capped at Rs 782/MMBTU for October-November in reference to 62:38 blend and with 100 percent RLNG for the month of December 2018-January 2019."
According to SNGPL, on the basis of letter from MoI&P, both fertilizer plants are making daily payments against RLNG supplies at the rate of Rs 782/MMBTU instead of RLNG price due to which company is suffering from liquidity shortage and is unable to meet its commitments to RLNG suppliers.
SNGPL has requested to take up the matter with Ministry of Finance for release of subsidy amount Rs1,332,184,376 against the gas supplies to both fertilizer plants from December 08, 2018 to December 31, 2018 on urgent basis so that company's operations may be carried out smoothly.
SNGPL, sources said has also requested Director General Gas to arrange disbursement of estimated subsidy amounting to Rs.1,716,544,489/- for January, 2019, worked out on the basis of December, 2018 consumption, which would be finalized at the time of billing on the basis of actual consumption by both fertilizer plants for the month of January, 2019.
The ECC, in its meeting of November 7, allowed two plants on the Sui Northern Gas Pipeline Limited (SNGPL) system, Fatima Fertilizer and Agri Tech, to continue their operations for a further two months viz December 2018 and January 2019. However, in order to resolve the pricing issues, the committee tasked Advisor to PM Abdul Razzak Dawood to formulate and recommend necessary modalities to the ECC.
In pursuance of the ECC-directed consultative session held by the Advisor on November 19th and 30th, wherein representatives from the Ministry of National Food Security and Research, Finance and Energy divisions participated, a consensus emerged that keeping these plants operational was the best available option.
It was also agreed that feasible gas price should remain within the current dealer transfer price ceiling of Rs1712/bag at Rs 782/mmbtu. "Since the gas price is charged in advance by SNGPL, the subsidy to SNGPL also needs to be paid in advance. The cumulative amount comes to Rs4.70 billion," it was revealed.
