Government Resumed Reform of the World Bank Backed Gas Sector

The government resumed reform of the World Bank-backed gas sector, left unfinished by former Prime Minister Shahid Khaqan Abbasi in his provincial resistance. The proposed reform would consider dismantling gas facilities such as Sui Northern Gas Pipelines Ltd (SNGPL) and Sui Southern Gas Pipelines Ltd (SSGCL) to at least five public sector companies, including gas transmission companies and four local distribution companies have. Electric Power Company.

World Bank mission is now in Islamabad

The intelligence sources told us that the World Bank mission is now in Islamabad and had detailed discussions with the government, including energy ministry, gas facilities, regulators and other stakeholders. Sources say the Sindh and Balochistan governments prohibit them from attending World Bank-led meetings.

But reservations about the idea that Punjab and Khyber Pakhtunkhwa's deliberate objection to the spirit of Articles 158 and 172 (3) of the Constitution. According to the sources, the federal government did not attend the meeting and said that they were dissatisfied with Sind and Balochistan. Sources added that the mission is likely to visit Quetta and Karachi next month.

After the dismantling of SNGPL and SSGCL, the reform proposes that the general transmission company (Transco) will introduce several operators to the distribution network as a gas network operator / operator in accordance with the National Transmission and Disassembly Company (NTDC) pattern in the grid.

Likewise, to protect the spirit of Article 158 of the Constitution, there will be four gas distribution companies with local boundaries to the sales area, in addition to dedicated domestic gas supply to consumers in the gas production area. This issue was addressed at the level of the CCP and Common Interests but could not be resolved by the strong opposition of the KP and the Sindhi government.

Grid will provide an open access

The grid will provide an open access distribution company with other private operators as imports of liquefied natural gas (LNG) increase. The proposed Transco will not give up its ownership of the gas because it only pays for the gas to be transported and the freight to be determined by the regulator and the private carrier for the LNG imported by the private carrier for the local gas to be sold by the local distribution company consumer.

Import and domestic gas will be treated in two parts for all legal and practical purposes. This means that domestic gas will go to local consumers in accordance with the available standards and imported gas will be supplied to large and large consumers on a firm basis of supply. Domestic consumers will not be able to withstand the financial impact of imported gas, which remains ring-fenced to large consumers at the current total cost recovery.

Domestic consumer prices will continue to be reported by the government, while imported gas prices will be market based. Domestic gas supplies are now stagnant at 4 billion cubic feet per day (bcfd), and deficiencies in excess of 2bcfd are partially linked through LNG imports.

This new model was designed by a consultant with the support of the World Bank to ensure that customers anywhere in the network can obtain gas with supply security and improved survival and sustainability in line with the provisions of the Constitution in relation to the supply of domestic gas resources.

The federal government understands that the new structure reflects local government concerns and that all costs of providing regasified LNG should be borne by the customer, without any burden on the consumer, not the RLNG. These principles are set by CCI, but actual implementation of tariffs and market structures involves a second tier of public hearings by the Oil and Gas Regulatory Authority (Ogra) mechanism.

Ogra's third party access rules

This will be done through Ogra's third party access rules, and buyers can use an off-the-shelf delivery system for shipping rates to enter into agreements with suppliers. Larger consumers can freely choose their choice of provider. The Center expects this move will lead to competition and transparency in the cost allocation among LNG importers. The four local distribution companies that were created without separating SNGPL and SSGC will help to allocate locally produced gas to their customers.

Each distribution company has the exclusive right to serve small consumers in the region, as is the case today. Independent consultant KPMG Taseer Hadi & Co concluded that by 2026, four reform models would result in an average cost increase of 170 to 330% for end-users (mostly residential and commercial), but prices would be lower than their incomes RLNG.

The government opposed the tariff hike on tandoors

In public shame about prices for lepers and bread crumbs, the government opposed the tariff hike on tandoors on Wednesday. In addition, 10% tariffs (RD) were imposed on cotton imports to increase future yields. The decision was taken at a meeting of the Economic Coordination Committee (ECC), chaired by Finance Minister Abdul Hafeez Shaikh. From 1 July 2019, the ECC has approved the proposal submitted by the Department of Energy to revise gas prices for flame mines, which will make the public more interested.

Prime Minister Imran Khan on Tuesday nominated relevant ministries to immediately lower the gas prices of tandoors that could cope with public instability. Senior officials said gas price cuts will be met by public funds. The ministry added that it would provide the gas company with a subsidy to compensate for the loss of income by paying Rs 1.5 billion in compensation.

He said gas tariffs for tandoor would be reduced to Rs700 per million British thermal units (mmBtu) for consumption exceeding 300 cubic meters instead of Rs1,283 per mmBtu based on the increase in roti and naan prices by the owner Rs3 He said. 5.

10pc duties on cotton imports

Similarly, the ratio for compact tandoors has been reduced to Rs110 for 100 cubic meters, Rs220 for 100 cubic meters, and Rs300 per mmBtu, Rs300 per mmBtu and Rs300 for 200 cubic meters instead of Rs553 per mmBtu. This decision did not change wheat prices, which contributed 55-60% to the price of roti, and gas rates that contribute 20-25% to the roti price were determined, although not yet announced. New tariffs that entered into force on July 1, 2019.

Based on this decision, a detailed survey of the nation's tandoors will be conducted to ensure that the benefits of the gas tariff amendment are applied to stand-alone tandoors or roadside restaurants for the poor and that unreasonable benefits will not be delivered. On the tandoors of a large restaurant. The ECC Congress has requested local governments and authorities to have effective price controls to ensure the sale of roti at existing prices.

And if tandoor owners fail to deliver the benefits of reduced gas prices, they decide to review the decision three months later. did. General people. A report on the wheat situation in Australia was submitted to the ECC, which allowed Passco and the local food department to use 7.635 million tons of total inventory.

It has been observed that the market's roti and naan prices will decline in the aftermath of the ban on wheat and flour exports, with wheat prices falling sharply in the market.

Research on cotton imports

In a summary compiled by the National Food Security and Research Ministry, ECC decided to impose a 10pc RD on cotton imports. The meeting gained information that cotton production and cotton cultivation areas have continued to decline over the past several years. Production dropped from more than 13m over two or three years ago to less than 10m from last harvest and required more than 450 tons of fiber, including a 1.5m veil of extra long staples not produced to meet domestic and export demand.

I would like to encourage impossible cotton cultivation if farmers can not offer better conditions by reducing their imports because of the low production last year. Cotton sowing is not a good sign that imports have not been encouraged over the past six months. The ECC also approved the implementation of the "Authorized Economic Operator Program" (AEO) envisaged under Customs Act 212 A (1) in 1969 by the ECC.

The decision is a requirement of the World Customs Organization for the standardized movement of goods for international trade. The ECC also allowed two LNG regasification terminals (Terminal 1, Engr Elengy Terminal Private Restrictions and Terminal 2 Pakistan Gas Port Consortium Limited) to assign the terminal's regasification capability to a third party on a commercial basis. Mutually agreed actions without affecting the supply.
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