Transparency International Pakistan (TIP) has asked Prime Minister Shehbaz Sharif to investigate the complaint against K-Electric (KE) for charging electricity at Rs. 35 per unit against Rs 17.5 per unit due to Sui Southern Gas Company’s (SSGCL) violation of Gas Priority List.
In a letter written to the prime minister in this regard, TIP stated that SSGCL is violating the Gas Priority List, notified by the Ministry of Energy in 2018, by stopping Natural Gas to KE since October 2021 in connivance with the owners of captive power plants, causing an additional expense of Rs. 131 billion annually to KE consumers. The letter states that TIP has received a complaint in this regard.
TIP highlighted that according to the Ministry of Energy (Petroleum Division), as per Natural Gas Allocation and Management Policy 2005-Revision in Priority Order, domestic and commercial consumers would get natural gas as 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, SSGCL has changed the priority of Captive Power to second and eliminated the power sector without any approval from the Ministry of Energy. Instead of Natural Gas, KE is being supplied RLNG which is costing Rs. 4,656 per MMBTU, whereas Natural Gas costs Rs. 857per MMBTU.
TIP, in its letter, stated that SSGC is supplying a total of 210 million cubic feet per day (MMCFD) natural gas to captive power plants at the rate of Rs 857 per MMBTU (to captive power plants) and Rs. 1087 per MMBTU (to captive general industries) which is at third priority order, while the power sector is at the second priority order and is supplied 70 MMCFD expensive RLNG at the rate of Rs. 4,656 per MMBTU instead of natural gas, consequently violating the gas priority list.
TIP said that currently, due to power generation on regasified liquefied natural gas (RLNG), the consumer of electricity is compelled to pay Rs. 17.5 per unit 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 per month, the 2.5 million consumers are paying about Rs. 131 billion extra per year in the consumption of electricity.
SSGCL maintains that it manages the load according to the available volumes which are currently up to 130 MMCFD maximum natural gas for power generation to KE. Any additional volumes required by KE over and above these volumes will be met through RLNG.
TIP further highlights that the export industries in Punjab are supplied RLNG at $9 per MMBTU (Rs. 1980 per MMBTU at Rs. 220 conversion rate), whereas the export industries in Karachi are supplied natural gas at Rs 857 per MMBTU, which is a big revenue loss, and this is also in connivance with the owners of the export industry.
Based on the authenticity of the submitted documents, prima facie, it appears that SSGC is violating the Gas Priority List notified in 2018, supplying expensive RLNG instead of Natural Gas to the KE which has increased the cost of electricity, making it very difficult for the consumers of Karachi, opines TIP.
TIP requested the prime minister to investigate the complaint and direct the concerned authorities to ensure the implementation of the Gas Priority List notified in 2018 as per the decision of the Federal Cabinet Committee on Energy, and to ensure that SSGC provides 130 MMCFD natural gas to power plants, so that lower cost electricity may be produced for the end consumers.
It further requested the prime minister to address the discrimination in 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.
Suggest the KE should use KANUP (Karachi Nuclear Power Plant) which was doing well with the KANUP. KE being the exclusive supplier of KE is a state monopoly and should be broken sliced to the Competetion Commission of Pakistan. KE should seek Wind Power with turbines which produces electricity. I’m doing research with the EU. I suggest the KE should take membership of IEA (international Energy Agency, Paris) for Civilian Nuclear Power, and should also inform the consumers of the outcome. Wind turbine is an excellent way to produce electric power. Please consider in the interest of the nation/consumers of Electric power. Best wishes