The Cabinet Committee on Energy (CCOE) has hinted at resuming gas supply to liquefied petroleum gas (LPG) producer Jamshoro Joint Venture Limited (JJVL) in an effort to mitigate gas crisis in current winter season.

The issue came up for discussion in a meeting of the cabinet body, chaired by Federal Minister for Planning, Development and Special Initiatives Asad Umar on Thursday.

Sources revealed that CCOE directed Sui Southern Gas Company (SSGC) – a public gas utility – to help make JJVL plant operational again. However, they said that the managing director of SSGC insisted that it should be allowed to sell LPG rather than JJVL.

JJVL plant has been shut for several months, removing 15% of domestic LPG supplies.

LPG accounts for about 1.5% of the total primary energy supply in the country. In financial year 2020-21, LPG consumption was around 1.788 million tons.

Average per day LPG consumption during the year stood at 4,857 tons, up 23% from around 3,950 tons per day in FY20.

In FY21, domestic LPG production catered for around 41% of consumer demand while the rest was imported. The share of domestic production declined from 52% in FY20 to 41% in FY21 whereas the contribution of imports jumped from 48% to 59%.

Earlier, Prime Minister Imran Khan held a meeting where JJVL management offered to provide LPG at a price cheaper by Rs500 per cylinder if the plant was allowed to resume production.

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The premier directed the Petroleum Division to draw up a plan for resuming production at the JJVL plant to mitigate gas shortage in winter.

LNG imports

According to sources, the CCOE discussed the import of liquefied natural gas (LNG) by the private sector as Pakistan LNG Limited (PLL) had failed to arrange required LNG cargoes in the face of higher prices in the global market.

It issued directives for facilitating the private sector in utilising the idle capacity of an LNG terminal to maximise gas supplies and tackle the crisis in winter.

The Petroleum Division presented the projected natural gas supply and different policy options for winter, said a statement.

The CCOE directed the Petroleum Division to ensure maximum gas supply while ensuring implementation of the demand management plan approved by the cabinet.

The cabinet committee also considered a summary presented by the Power Division. It was told that all new renewable energy projects would participate in open competitive bidding to ensure the least-cost procurement of renewable electricity.

The CCOE endorsed the summary and called for accelerating the bidding process.

Committee chairman sought from the Power Division a detailed roadmap with milestones for setting up renewable energy projects, including the potential locations and details of competitive bidding, in the next meeting.

Read more Winter triggers gas crisis

The committee reviewed the Circular Debt Report October 2021, submitted by the Power Division, and appreciated the sustained reduction in the circular debt accumulation.

It was informed that the performance of power distribution companies was consistently improving.

“The sector is also adjusting to the post-Covid scenario where the collection of dues has dropped significantly. The government is releasing budget subsidy as per plan in order to ensure sustainability of the sector,” the meeting was told.

Minister for energy, minister for maritime affairs, adviser to PM on commerce and industries, adviser on finance, Ogra chairman, Nepra chairman, representatives of regulatory authorities, senior officials of ministries and divisions participated in the meeting.

Published in The Express Tribune, December 3rd, 2021.

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