Shrinking gas reserves, rising demand

(By Zafar Bhutta) Despite shortage, cabinet approves 235 new gas supply schemes

As general elections are around the corner, the federal cabinet has approved 235 new gas supply schemes of billions of rupees for the constituencies of parliamentarians, mainly from Punjab, at a time when existing consumers are facing gas shortage, particularly during the winter.

These schemes were recommended by a ministerial committee in a series of meetings held in 2017 to please voters and get their support in the upcoming polls.

The projects were tabled for approval of the cabinet in a meeting held in the first week of January 2018.

Though hundreds of schemes have got the go-ahead for the provision of gas to far-off villages, domestic gas production has virtually remained stagnant over the past many years as the current government’s primary focus has been on liquefied natural gas (LNG) imports.

The government has so far failed to auction hydrocarbon-rich blocks to exploration companies for giving a boost to domestic gas production.

The cabinet was told that the ministerial committee held six meetings in 2017 and approved and recommended 104 gas schemes where no government funding was required. Apart from these, there were 36 schemes for which funds had been allocated from the Sustainable Development Goals (SDGs) programme.

It also outlined 95 schemes where government financing was required depending on the availability of funds.

The ministerial committee had been constituted in April 2017 comprising ministers for finance, petroleum, parliamentary affairs and planning and development with the task of recommending gas supply schemes for the constituencies of parliamentarians.

The Petroleum Division sought approval of the schemes and also the allocation of Rs15 billion for their implementation. The cabinet gave its approval.

In April 2017, after six years, the federal cabinet finally lifted a moratorium on new gas connections for both private and commercial consumers. The ban had been imposed in 2011 by the Pakistan Peoples Party (PPP) government in the wake of acute gas shortages.

Chaired by ex-prime minister Nawaz Sharif, the cabinet removed the ban on recommendations of the Cabinet Committee on Energy. It also approved the execution of schemes initiated during the tenure of the current government.

After removing the restrictions, the government approved 235 new gas supply schemes. The curbs could not remain in place due to government pressure which wanted to launch politically motivated gas supply schemes to win over voters in upcoming elections.