SNGPL directed to fuel export-oriented sectors without subsidy

July 23, 2023 (MLN): Ministry of Energy Petroleum Division on Sunday directed Sui Northern Gas Pipelines Limited (SNGPL) to provide gas to five export-oriented sectors without subsidy, said the latest notification issued by the said ministry.

The gas to the industries will be provided as per ECC regulation. 

 To recall, on May 03, 2023, the said ministry ordered SNGP to charge the notified rates issued by the Oil and Gas Regulatory Authority (OGRA) for the gas supplied to these five sectors in order to recover the cost of imported gas.

In response to a letter wherein SNGPL asked supplementary grant of Rs4 billion by enabling SNGPL to a further subsidy of Rs2bn each for March and June 2023, the Ministry said that supplying subsidized gas to the export sector in the absence of any available subsidy budget would pose a risk to the sustainability of RLNG supply chain.

"You are therefore advised that beyond April 2023 supply at subsidized tariff may be stopped and OGRA-notified rates shall be charged to the gas supplied in order to recover the cost of imported gas to avoid any impact on SNGPL's obligation towards payment of upstream suppliers," the letter read. 

To note, the company has already withdrawn the concessionary tariff to Five Export Oriented sectors as the subsidy allocated by the government for the supply of gas/RLNG at a subsidized rate has been fully exhausted.

"This is to inform you that the subsidy allocated by GOP for the supply of Gas / RLNG at a subsidized rate to Five Export Oriented Sectors for FY 2022-23, has been fully exhausted," the notification issued by the company on April 28 reads.

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