Pakistani Prime Minister Imran Khan. Photo: AFP / PTI
Excess billing and a shortage of gas has aggravated the country’s energy crisis
By Kunwar Khuldune Shahid 12 February 2019
Pakistan Prime Minister Imran Khan summoned his Cabinet Committee on Energy for an urgent meeting last week to address excessive gas billing that led to mass anger in December and January – the peak of winter.
Gas consumers across the country complained of being overcharged for the month of December. This prompted the energy committee to conduct an independent audit of people’s bills.
Outrage over excessive bills is the latest energy-related crisis to hit Pakistan. Indeed, a shortage of natural gas has jolted not just domestic consumers but damaged industries and businesses as well.
As temperatures fell as low as -14 degrees Celsius in parts of the country, demand for gas increased significantly amid insufficient supply. Pakistan currently has a gas shortfall of 4.0 billion cubic feet per day (bcfd) and the figure is expected to reach 8.5 bcfd, if it continues to grow at the same rate.
Analysts say Pakistan’s inability to make sufficient gas available from reservoirs that produce both oil and gas is a major factor behind the shortage. Energy suppliers, including the state-owned Pakistan Petroleum Ltd, have been unable to sell enough oil, which has resulted in cutbacks in oil production. So, gas production has also decreased from existing reserves.
New reserves needed
Meanwhile, insufficient effort has been made to find new reserves. This is underlined by the fact that one of Pakistan’s more prolific gas reservoirs, named Sui, was discovered in 1852. Gas reserves in Sui, and other prominent fields in Mari and Kandhkot, are depleting.
In November, the Economic Coordination Committee (ECC) revealed that the National Power Parks Management Co (NPPMC) has been mandated to set up two regasified liquefied natural gas plants (RLNG) at Balloki and Bahadur Shah with capacities of 1,223 MW and 1,230 MW respectively.
The inability to address the gas shortfall has also led to a political crisis. In December, the Pakistan People’s Party-led Sindh government warned the national government that it would cut off gas supply to other provinces if the federal government doesn’t put an end to gas load-shedding in Sindh. The province produces 70% of Pakistan’s natural gas.
The Sindh government’s warning came after public transport, power stations and CNG pumps across the country came to a standstill due to the unavailability of gas. Under Article 158 of the Constitution, Sindh has the first right over the gas it produces.
Sindh Transport Minister Owais Qadir Shah issued a 24-hour deadline to the Pakistan Tehrik-e-Insaf (PTI) federal government, which prompted the prime minister to suspend the directors of Sui Northern Gas Pipelines Ltd and Sui Southern Gas Pipelines Ltd. PM Imran Khan ordered an investigation into the companies’ failure to inform the government about an expected gas shortfall in winter.
The government’s decision to stop Pakistan LNG Ltd (PLL) from importing additional fuel in August has been seen by many as critical in the eventual winter shortfall. Petroleum Minister Ghulam Sarwar Khan said the decision was taken to renegotiate deals for LNG terminals with Engro Corp, but stakeholders are dubious about the explanation.
‘Use LNG’
Energy experts have urged the government to use liquefied natural gas (LNG) to overcome the national shortage. Pakistan revised its LNG policy in 2011, six years after it was first passed. The ECC approved the country’s first LNG terminal in 2013.
“It’s evident that the government fell to a conspiracy theory [against LNG imports], or is hiding the actual facts behind the gas crisis that has hit the country this winter, because Sindh has never witnessed such gas shortage,” All Pakistan CNG Association chairman Ghayas Paracha said. “The province produces the majority of the country’s gas, and it faced the majority of the after-effects of the gas shortage.”
The government has been at loggerheads with the Pakistan People’s Party (PPP) for control over the only province that the ruling party doesn’t govern and that is also being cited as a factor in the energy shortfall that hit Sindh.
Pakistan’s failure to make the most of its LNG deal with Qatar has also been criticized. In December, Islamabad asked Doha for $2 billion worth of LNG on deferred payment.
Islamabad’s failure to import gas is also visible in the stalled pipeline projects. While the Iran-Pakistan pipeline has been hit by US sanctions, little progress has been made on the Turkmenistan-Afghanistan-Pakistan-India (TAPI) pipeline. The pipeline is expected to transport 3.2 bcfd, with the TAPI Pipeline Company Ltd (TPCL) expecting to inaugurate the project in March.
Former finance minister Salman Shah said: “It is important for Pakistan to look for alternative sources for gas, because that would allow the country to consume gas at the most affordable price. The gas problem in the country is the same as the power problem – there is no competition. We need to make the energy sector competitive, where private companies address the demand and supply, and the customers have the choice to opt to fulfill their energy needs from their preferred source.”
The government has also been urged to address the issue of gas theft and take action against illegal practices aggravating Pakistan’s multi-pronged energy crisis.