Opinion
 
Gas distribution - Time to get priorities right
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January 21, 2011
The shortage of gas was also discussed in the National Assembly and Senate of Pakistan, and the parliamentarian pointed out that when some one applies for establishing an industry, he signs a document according to which he must adopt an alternate fuel system for his industry, especially for three months in winter season.

The industrial units consume around 20 per cent of total natural gas. The government can improve supply of gas to other sectors, especially to domestic sector, by disconnecting gas to the industrial sector. But this is not a permanent solution. It is evident that despite disconnecting more than three thousands CNG stations around the country for two days a week, gas distributions companies could not restore gas supply for domestic consumers that consume 15.6 per cent of total gas. This is high time the government expedited the gas import projects and kept it at the top priority, as energy experts forecast that the current natural gas reserves in the country would be depleted in next two decades and there would be no gas for the generations to come.

According to International Association of Natural Gas Vehicles, Pakistan has the world’s highest number of vehicles running on Compressed Natural Gas (CNG). The number is over two millions. Pakistan also has the world’s highest number of CNG refueling stations that exceeds three thousand across the country. This growth has been phenomenal noting that CNG as a fuel was made available in Pakistan only in 1992.

For many years, Argentina and Brazil used to be the world leaders in terms of number of vehicles using CNG. Pakistan overtook Brazil in 2006 and Argentina in 2008 to become the world’s largest consumer of CNG in vehicles.

Compressed Natural Gas (CNG) is a substitute for gasoline (petrol) or diesel fuel. It is considered to be an environmentally "clean" alternative to those fuels. It is made by compressing methane (CH4) extracted from natural gas. It is stored and distributed in hard containers, usually cylinders.

Argentina and Brazil, in the Southern Cone of Latin America, are the two countries with the largest fleets of CNG vehicles. Conversion has been facilitated by a substantial price differential with liquid fuels, locally-produced conversion equipment and a growing CNG-delivery infrastructure. A 'Blue-network' of CNG stations is being developed on the major highways of the Southern Cone (including Chile and Bolivia) to allow for long-haul transportation fuelled by CNG.

In response to high fuel prices and environmental concerns, compressed natural gas is starting to be used in light-duty passenger vehicles and pickup trucks, medium-duty delivery trucks, and in transit and school buses.

CNG had grown into one of the major fuel sources used in car engines in Pakistan, Bangladesh and India as the cost of CNG is almost a third of the cost of Petrol in terms of calorific value, resulting in substantial saving in fuel cost, and investment on the CNG kit is paid back in a short period. Moreover, use of CNG as a fuel reduces vehicular exhaust emissions significantly. Carbon Monoxide emissions are reduced by 70 to 90 per cent and Hydrocarbon emissions by 40 to 60 per cent as compared to vehicles that use the conventional fuel - Petrol. Carbon Dioxide emissions, a cause for global warming, are also reduced significantly by 10 per cent.

Renowned environmentalist Dr. Adil Najam, during a two-day international conference on climate change and development, observed that Pakistan is the most vulnerable country in South Asia to pollution because of the large-scale adoption of generators and uninterruptible power supply units. He, however, expressed satisfaction with the wide-scale use of Compressed Natural Gas (CNG) in the country. CNG is used as an alternative fuel in cars because it costs almost half that of petrol and diesel. It is also more environment-friendly than petrol and diesel, which is an added advantage.

Najam urged developing countries to provide means to the developing countries and help them in coping with the climate change.

There is no doubt that the CNG is cost-effective and environment-friendly fuel. Due to widespread reliance on CNG, the import of oil consequently reduce manifold which saved the valuable foreign exchange.

It is also a fact that policy makers could not foresee the available resources and natural gas reserves and an artificial boom in the CNG sector was created in early 2000. Local investors found it a convenient and profitable venture and suddenly the country witnessed a mushroom growth of CNG station at every nook and corner. Later, when domestic user faced continuous shortage of gas supply in winter and people staged protest, the policy makers then became conscious of their planning errors.


Now the situation is at its worst. Despite disconnecting CNG stations for two days in a week, the domestic user is still deprived of gas. Ironically, despite utilizing no gas, consumers have to pay the bill more than what they pay in summer when the gas is available day and night. On the other hand, these two days are also problematic for those who rely on CNG in their vehicles.

But the situation is more awkward for CNG station owners who finance their business on heavy markups, but in the present circumstances, are afraid that how they can manage to pay back the loans to financial institutions. Ghiyas Abdullah Paracha, Chairman CNG Association, is of the view that gas supply to industries and bulk gas consumers should immediately be suspended to improve gas crises for domestic sector. He said SNGPL ordered and issued notices to keep all CNGs of Lahore and Islamabad/Rawalpindi closed for unlimited period, which was not fair.

He observed that although all CNG stations remained closed for two days a week, gas supply to domestic sector did not improve. Every one knows that closing these stations is not the solution to gas crisis. It is evident that CNG stations are not responsible for gas crisis, but that bulk gas users are responsible for this problem as they use heavy amount of gas and left a very little in network for urban areas. He said “we are continuously telling the government to suspend gas supply to bulk consumers, but government did not admit this fact so now the new gas crisis has proved that government’s policy was wrong and this all is the result of this wrong policy.”

If government sincerely wants to restore proper gas supply to domestic sector, gas supply to industries (bulk gas consumers) should be stopped immediately and they must go on to the alternate fuels, which may resolve this issue, he said.

But even now if the government is not going to suspend gas supply to bulk consumers, it will create a big mess. All people will come on roads and it will compel us too to come on roads with public, he added.

On the other hand, the government argues it had acted in accordance with the Natural Gas Load and Management Policy to ensure optimal utilization of natural gas for the best socio-economic development of the country. According to this policy, the domestic and commercial sector are placed at the top priority in terms of gas supply; fertilizer and industrial sector take the second place; Independent Power Plants (IPPs) as well as WAPDA and KESC power plants having firm gas supply commitment fall at the third place; central industrial and CNG sector at fourth priority; and power sector and cement industry at fifth and sixth place, respectively.

As far as the load management is concerned, the percentage of domestic sector is 15.6; commercial sector, 2.4; fertilizer sector, 5.2; industrial sector, 19.4; WAPDA, KESC and Power Plants, 32.5; cement plants, 1.2; and CNG, just 0.5 per cent.

The shortage of gas was also discussed in the National Assembly and Senate of Pakistan, and the parliamentarian pointed out that when some one applies for establishing an industry, he signs a document according to which he must adopt an alternate fuel system for his industry, especially for three months in winter season.

The industrial units consume around 20 per cent of total natural gas. The government can improve supply of gas to other sectors, especially to domestic sector, by disconnecting gas to the industrial sector. But this is not a permanent solution. It is evident that despite disconnecting more than three thousands CNG stations around the country for two days a week, gas distributions companies could not restore gas supply for domestic consumers that consume 15.6 per cent of total gas. This is high time the government expedited the gas import projects and kept it at the top priority, as energy experts forecast that the current natural gas reserves in the country would be depleted in next two decades and there would be no gas for the generations to come.

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