– Private sector’s function in gas supply chain being hampered
– UGDC’s right to allotment of terminal, pipe capacity shielded by legal structure
ISLAMABAD: The transportation industry, which relies upon Compressed Gas (CNG), has whined to the prime minister that it is facing unjust therapy and also roadblocks from numerous government institutions and entities in issues of pricing, supplies, imports and pipe capability for transport of melted gas (LNG).
In a detailed depiction, the copies of which have been shared with the Ministry of Energy and the Oil and also Gas Regulatory Authority (Ogra) as well as the Universal Gas Circulation Business (UGDC) has described the ‘obstacles versus private sector function in gas supply’ since its inception in 2014.
In short, the CNG industry is needed to pay the greatest rate for neighborhood gas or imported LNG compared to all other consumers and is the first to face closure after any kind of supply deficiency and yet it is not permitted to prepare its very own imports in offense of policies, laws as well as laws for anxiety that its less expensive imports could overthrow public market syndicates.
The UGDC’s chief executive officer, Ghiyas Abdullah Paracha, claimed as gas shortage enhanced to 2BCF (billion cubic feet) versus the annual supply of 4BCF, the CNG sector in addition to a number of other gas-based markets were seriously damaged as well as dealt with survival challenges. With the government decision to promote economic sector in minimizing gas deficiency, several reps of CNG industry established the UGDC in 2014 as an unique purpose car for import as well as regasification of LNG and also supply of regasified LNG to CNG stations as well as other consumers by utilizing the pipeline of gas firms whereby they were currently obtaining materials.
“Ever since its incorporation, UGDC made chaotic efforts and took countless actions to protect all commercial plans so as to provide re-gasified LNG to CNG terminals as well as various other gas customers,” Mr Paracha stated.
He put on record that when UGDC turned out as the successful prospective buyer to utilise surplus ability of LNG terminals, the auctions were not efficiently wrapped up by public sector entities. “UGDC ranged from pillar to post for the allocation of pipeline ability which is the essential network to transport regasified LNG to CNG stations and gas customers” as enabled under 3rd party gain access to (TPA) guidelines and also looked for to authorize gas transportation arrangements with gas companies with the support of the petroleum ministry however basically none of these requests and MOUs were effectively authorized or authorized.
The outcome was that due to the unused contracted terminal ability of Pakistan LNG Ltd, a cumulative burden of regarding $100 million (regarding Rs16bn) was passed on to gas customers in the last three years, according to main working at the rate of $20 million in 2017-18, $35million in 2018-19 and also $45million in 2019-20.
Furthermore, one more Rs80bn import saving to the federal government had actually been thrown away in the form of non-availability of gas, regasification charges to LNG terminals, transportation charges to gas companies and tax obligation losses.
“In contrast to its efficient use the economic sector’s duty in the gas supply chain seems hampered,” the UGDC stated, explaining that one or more private sector licensees were alloted around 200MMCFD of terminal capacities to import and regasify LNG, and were additionally designated the matching pipeline abilities to enable such licensees to move as well as supply re-gasified LNG to gas customers.
Mr Paracha said the actions as well as outcomes suggested that “UGDC is not purposely permitted to exercise its right of authorized profession and business– to carry out the gas supply service” regardless of being the nation’s initial economic sector gas carrier and this remained in violation of legislations, Ogra Gas (Third-Party Accessibility) Policies, 2018.
These regulations bound the Sui companies to provide and facilitate access to offered capability to the certified shippers and also designate available ability on first-come-first-serve basis and deal and assist in access to available capacity to carriers. It cautioned that UGDC’s right to allowance of terminal and also pipeline ability was well shielded by legal structure.
“It will only be fair and affordable to honour UGDC’s right in practice also,” Mr Paracha claimed, advising that any type of allotment of pipeline as well as terminal abilities to an entity on the existing or future gas facilities in discrepancy from the above lawful structure will not only be violation of UGDC’s legal rights but likewise be a statutory offense.