- M/s SSGCL without any approval changed priority of Captive Power to second and the Power sector is eliminated
ISLAMABAD: Transparency International Pakistan (TIP) has asked the Prime Minister of Pakistan to order an investigation into complaints against KE charging electricity at Rs35/unit against Rs17.5/unit due to SSGCL violation of Gas Priority List.
TIP has written a letter to PM Shahbaz Sharif with regard to complaint against K.E charging electricity at Rs35/unit (including taxes, FCA, line losses) against Rs17.5/unit (including taxes, FCA, line losses) due to SSGCL violation of Gas Priority List notified in 2018 by Ministry of Energy by stopping Natural Gas to KE form October 2021 in Connivance with Owners of Captive Power Plants which is causing additional Rs131 billion annually expense to KE consumers.
TIP Pakistan has received a complaint against KE charging electricity at Rs35/unit (including taxes, FCA, line losses) against Rs17.5/unit (including taxes, FCA, line losses) due to M/s SSGCL violation of Gas Priority List notified in 2018 by Ministry of Energy by stopping Natural Gas to KE form October 2021 in connivance with owners of Captive Power Plants which is causing additional approx. Rs131 billion Annually expense to KE consumers.
According to Ministry of Energy (Petroleum Division) Notification NG(I)-7(158),17-LS dated 15th October 2018, that as per Natural Gas Allocation and Management Policy 2005-Revision in Priority Order, domestic and commercial consumers would get natural gas on first priority, power sector on second, General industrial, Fertilizer and Captive Power on third, Cement Sector including its Captive Power on forth and CNG sector on fifth/
However, M/s SSGCL without any approval of the Ministry of Energy/ Cabinet has changed the priority of Captive Power to second and the Power sector is eliminated, and instead KE is being supplied to RLNG w.e.f. October 2021 which is costly Rs4,656/MMBTU whereas Natural Gas is Rs857/MMBTU.
TIP in its letter stated that SSGC is supplying a total of 210 MMCFD natural gas to Captive Power plants at the rate of Rs 857/MMBTU (to captive power plants) and Rs1087/MMBTU (to captive general industries) which is at third priority order, while the power sector which is at the second priority order is supplied 70 MMCFD expensive RLNG at the rate of Rs. 4,656/MMBTU instead of natural gas violating the Gas priority list.
Currently, due to power generation on RLNG, the consumer of electricity is compelled to pay Rs. 17.5/unit (approx.) additional electricity charges (including all taxes, FCA and line losses) compared to electricity generation on natural gas, which means that if a consumer consumes on average 500 units/month, the 2.5 million consumers are paying approximately Rs. 131 billion extra per year in the consumption of electricity.
According to SSGCL letter No. Ref: MD.KE/334 to KE dated 23 April 2018, SSGC to manage the load according to the available volumes which is currently up to 130 MMCFD maximum natural gas for power generation to K-Electric. Any additional volumes required by K-Electric over and above these volumes will be met through RLNG.
Another discriminatory issue is that the export industries in Punjab is supplied RLNG at USD 9/MMBTU which is Rs. 1980/ MMBTU (at Rs. 220 conversion rate), whereas the export industries in Karachi are supplied Natural Gas at Rs 857/MMBTU, which is a big revenue loss, and this is also in connivance with the owners of the export industry and M/s SSGCL.
Based on the authenticity of the submitted documents, prima facie, it appears that SSGC is violating Gas Priority List notified in 2018 which is costing Rs 35/unit electricity charges to consumers of KE, and supplying Natural Gas to Captive Power Plants which stands third in priority order. SSGC is only supplying expensive RLNG instead of Natural Gas to the power plants i.e. KE which has increased the cost of electricity, making it very difficult for the consumers of Karachi.
TI Pakistan requests the Prime Minister of Pakistan to investigate the complaint, and direct the concerned authorities to ensure the implementation of Gas Priority List notified in 2018 as per the decision of Federal Cabinet Committee on Energy, and ensure that SSGC to provide 130 MMCFD natural gas to power plants, so that lower cost electricity may be produced for the end consumers. The Prime Minister is also requested to address the discrimination of supplying RLNG and Natural Gas supply to the export industries of Punjab and the export industry of Karachi which is also causing huge losses to the Government of Pakistan.
