Four-Month Incentive Package On Incremental Power Consumption In Winter

Government Would Not Be Able To Curtail Gas Usage As Consumers Are Unlikely To Procure Appliances To Avail Incentive On Use Of Power Tariff

Four-Month Incentive Package On Incremental Power Consumption In Winter

A four-month incentive package on incremental power consumption in winter to discourage the use of gas may not bring the desired result for the federal government, an anecdotal survey carried out by Business Recorder revealed. The government is considering boosting consumption of surplus power and conserve the utilisation of scarce indigenous gas in the winter season and the Ministry of Energy is seeking National Electric Power Regulatory Authority (NEPRA)’s approval in this regard. The government has yet to announce its seasonal gas plan for the winter.

All Pakistan Anjuman-e-Tajiran and Islamabad Traders Action Committee President Ajmal Baloch said that the government would not be able to curtail gas usage as the consumers are unlikely to procure appliances to avail the incentive on incremental use of power tariff. “Why should I purchase an electric stove worth Rs 20,000 to bring down my energy bill when the difference in the per unit use of electricity and gas would be no more than between Rs5 to 10 per unit,” he said. A representative of Association of Builders and Developers of Pakistan (ABAD) Muhammad Habib said those who had installed gas geyser are unlikely to buy expensive electric water heaters only for the winter. He further maintained that the price of electric heating appliances would further increase with the announcement of the power tariff incentives.

Waheed Ahmed, an electronic store owner, said gas appliances are generally much more efficient than electric appliances. Giving an example of a stove, he said, an electric range uses three-time as much energy as a natural gas burner to produce and deliver the same heat. A Gilani Research Foundation Survey carried out by Gallup Pakistan states that 61 percent Pakistanis do not use any heating system during winters; 20 percent use gas heaters, 10 percent electricity heaters and 6 percent kerosene oil/ wood/coal.

Package on incremental consumption for electricity consumers includes domestic, commercial and general services to encourage the maximum use of electric power for heating purposes to minimise the capacity charges payable on Independent Power Producers. The power sector is the largest consumer of natural gas at 37 percent, followed by domestic consumers (20 percent) and industry (19 percent). Overall annual gas consumption in the country is growing at around 6 percent per annum, according to the State of the Regulated Petroleum Industry’ Report 2020.

Two gas utilities -Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company Limited (SSGCL) find it difficult to meet gas demands of their consumers in the winter season especially in peak months starting from December to February every year. And furthermore are compelled to provide expensive imported Liquefied Natural Gas (LNG) to their consumers at highly subsidised rates. Resultantly, the gas sector circular debt has been increasing rapidly because of rising LNG prices in the international market.

Sources said that SNGPL network will face around 370 million cubic feet per day (MMCFD) shortfall while the SSGCL network will face approximately 250 mmcfd shortfall during the coming winter season. With a summary for increase in price of natural gas by up to 35 per cent, Cabinet Committee on Energy (CCoE) and federal cabinet has approved a flat tariff of Rs12.96 per unit for electricity consumers across the country on additional consumption for four winter months in an effort to promote use of electrical appliances for heating room and water. However Nepra approval is still awaited.

This news was originally published at Bre Corder

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