ISLAMABAD - The government has called a meeting of the Economic Coordination Committee (ECC) of the cabinet today (Tuesday) to take up gas load management plan for the winter and progress on acquiring Islamic Financing Facility to reduce the circular debt .

The ECC, which would be chaired by Finance Minister Asad Umar, is expected to discuss three points’ agenda including Issuance of Government of Pakistan (GoP) Guarantee to National Power Parks Management Company (Private) Limited. The top economic decisions making body of the country would take the progress on acquiring Islamic Financing Facility to reduce the soaring circular debt of the country. The ECC has recently directed Power Division and Finance Division to prepare a joint plan for raising Rs 300 billion Islamic financing by mortgaging Discos’s assets. The amount will be used to clear some portion of circular debt which has now touched Rs700 billion in addition to Rs 600 billion parked in the books of Power Holding Private Limited (PHPL).

The ECC would also take the gas load management plan for ongoing winter seasons, according to the agenda of meeting.  The ECC would decide whether to allow gas loadshedding or to give subsidy for providing subsidy on imported gas. The government is expecting gas shortfall in next three months (December to January), as the gap between supply and demand would surge due to less availability of local gas. On the other hand, the government would have to announce a subsidy for the provision of imported liquefied natural gas (LNG) at affordable prices.

According to the summary moved by Ministry of Petroleum and Natural Resources, the ECC should allow Sui Northern Gas Pipelines Limited (SNGPL) to inject the imported LNG volume for consumption by domestic and commercial consumers provided OGRA allows volumetric adjustment and financial impact on cost neutral basis in line with the ECC’s earlier decision.  It has also recommended that given the wider difference in natural gas sale price and imported LNG price, the ECC should allow SNGPL should be provided direct subsidy against injection of imported LNG volume for consumption by domestic and commercial consumers in next three months (December to February).

The summary further stated that in the absence of imported LNG on subsidy, the ECC should allow SNGPL will manage the load of domestic and commercial consumers through varied level of pressure management during off-peak hours.  Petroleum division estimated up to 50pc gas shortfall to urban population in Punjab and to some extent in Khyber Pakhtunkhwa, — both being served by Sui Northern Gas Pipelines Limited (SNGPL). It has proposed providing direct subsidy to the SNGPL for domestic consumers with an injection of about 150 million cubic feet per day (MMCFD) additional gas at three peak consumption intervals around cooking hours. The government may have to shift the entire industry including the five zero rated export sectors and power generation to imported liquefied natural gas (LNG) instead of domestic gas supplies.