Gas shortfall worsened; ECC puts the import of CNG kits under a ban

Another attempt from the government to put reins on the gas shortfall in the country became public on Thursday, when the Economic Coordination Committee (ECC) of the Cabinet imposed a ban on the import of CNG conversion kits and
cylinders. The installation of new CNG kits in the vehicles will also be restricted immediately as per the ECC ban, with the exception that the owners of the existing shall be allowed to install them.

The ECC ban will not encompass the CNG-fitted public vans and buses currently operating in the country. However, tax and duty exemptions on the export of petroleum products to Afghanistan and Central Asian nations has been taken
off to encourage the exports in the particular sector. Gas shortage on domestic and industrial levels has already became even worse with the beginning of the winter season and instead of devising a permanent solution for the problem, the authorities are still
content with the introduction of temporary way outs from the crisis.

Finance Minister, Dr. Abdul Hafeez Sheikh, headed the ECC meeting on Thursday, later announcing the ban upon the exports of CNG kits. The Finance Minister also cited that fertilizers plants operating in the country shall be supplied
with natural gas on the basis of their energy efficiency. The Ministry of Industries was also instructed to negotiate the fertilizers producers to cut down prices, aligning with the subsidy allowed by the government.

Concerns have risen among the fertilizer sector, whose representatives have been persistently whining over the preferential supply of natural gas to certain industrial sectors. Senior officials from the fertilizer sector reported
that they are suffering grave losses due to insufficient supply of gas from Sui Northern Gas Pipelines (SNGPL) network. They have cited that if such devastating shortfall continues in the near future, four of the major fertilizers producing plants on the SNGPL
network will be compelled to face a permanent closure. Such circumstances may lead to a significant drop of 2.2 million tons of urea production in the sector, branching out several other adverse outcomes.

Both industrial and domestic consumers of natural gas are seeking a permanent solution from the government. Perhaps a more efficiently devised distribution plan of natural gas can soften the crisis to a certain extend at present
but ultimately it needs to be a long terms solution which can provide comfort to the consumers across the country.

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Posted by Farhan Hameed on Dec 16 2011. Filed under Business, Pakistan. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry