ECC Okays Rs. 747.5 Million for Gas Supply to 85 Villages

The Economic Coordination Committee (ECC) of the Federal Cabinet deliberated upon and approved a Technical Supplementary Grant (TSG) amounting to Rs. 747.539 million for releasing gas to 85 villages/localities during the current fiscal year (CFY).

Federal Minister for Finance and Revenue Shaukat Tarin presided over a meeting of the ECC today that was attended by Federal Minister for National Food Security and Research Syed Fakhar Imam, Adviser to the Prime Minister on Commerce and Investment Abdul Razak Dawood, federal secretaries and other senior officials.

Apropos of the Ministry of Energy’s (Petroleum Division) proposal on the supply of gas to villages/localities in a five km radius of gas-producing fields, the ECC approved a Supplementary Grant amounting to Rs. 747.539 million in favor of the Petroleum Division for further release to Sui Southern Gas Company (SSGC) to facilitate the 85 areas during the current fiscal year.

Two public sector companies SSGC and Sui Northern Gas Pipelines Limited (SNGPL) are supplying natural gas in Pakistan via their extensive networks of pipelines. The Petroleum Division had approached the Finance Division and the Planning Division for SSGC’s requirement of Rs. 747.539 million during the current fiscal year.

In order to undertake the gasification of towns/villages/localities, both the Sui companies normally prepare cost estimates/feasibility in-house based on the per consumer cost criteria that were approved by the ECC in 2008 whereby if a gasification project per consumer cost criteria exceeds the approved one, the Federal Government has to fund the amount exceeding the criteria.

Section 21(2)(d) of the Oil & Gas Regulatory Authority (OGRA) Ordinance, 2002 also stipulates that the Federal Government may issue policy guidelines to the OGRA for the supply of natural gas to service new areas along with financial incentives.

The Supreme Court of Pakistan, vide its decision regarding the gasification of towns/villages dated December 27, 2013 in C.P No. 46/2013, directed that:

The Ministry of Petroleum and Natural Resources shall ensure implementation of the Prime Minister’s directive of September 15, 2003, to all surrounding localities/villages falling within the radius of 5km of all gas fields on a priority basis.

The Prime Minister’s directive dated September 15, 2003, referred to above, is:

The Prime Minister has been pleased to direct that gas can be provided to villages falling in the radius of 5 km from the gas source (Zamzama gas field, Tehsil Johi, Distt. Dadu, Sindh). Prime Minister was further pleased to announce that this principle would apply to all gas fields and that gas may be provided to all the surrounding localities/villages falling in the radius of 5 km of all gas fields, on a priority basis.

Subsequently, a meeting of the SAP Steering Committee was held on February 23, 2022, and it was decided that the Planning Division would be requested to allocate funds for the supply of gas to villages/localities falling within a five km radius of gas-producing fields.

The Sindh High Court had taken up the case of the gasification of villages/localities within a five km radius of the gas fields in Sindh, and vide its order dated February 14, 2022, had summoned the Secretary Petroleum and Secretary Finance on March 14, 2022. It had also revived the Show Cause Notice dated November 2, 2020 to explain why Contempt of Court should not be proceeded with for non-compliance with court orders.

Foregoing the submissions in view, the Petroleum Division had submitted the following proposals for the consideration of the ECC:

Supplementary Grant amounting to Rs. 747.539 million in favor of the Petroleum Division may be approved for release to SSGC to undertake gasification of 85 villages/localities in CFY and for the funds’ requirements of the next financial year in the case of SSGC and SNGPL, the Finance Division is advised to make available appropriate funding in the budget of the Petroleum Division as a recurring item under its development budget.

The summary was circulated to the Finance and Planning, Development & Special Initiatives Divisions for their remarks. The Planning Division supported the proposal whereas the Finance Division was of the view that the Planning Division may allocate the required funds under the Public Sector Development Program (PSDP) or the Cabinet Division may arrange for the funds through Sustainable Development Goals (SDGs) allocation.

After a full review of the TSG, the proposal was submitted for the consideration of the ECC, which has now been approved for urgent facilitation.