ISLAMABAD   -   Pakistan is considering a proposal to sell LNG being procured from Qatar on long term contract in the spot market, and will be seeking Doha’s nod for the purpose. The matter came under discussion in the public hearing, conducted by NEPRA, on the petition of CPPA-G for allowing to transfer the burden of Rs3.41 per unit to Discos consumers on account of monthly fuel charges adjustments for the month of May.

In its petition filed on behalf of Ex-Wapda Distribution Companies (XWDiscos), the CPPA-G has claimed that reference fuel charges for May 2024 were Rs 5.7090 per unit, while actual fuel charges were Rs 9.1223 per unit, therefore positive adjustment of Rs 3.4133 per unit be granted. It was informed during the public hearing that increase in electricity rates would result in burdening the power consumers by over Rs 48 billion (FCA 41b+GST 7.38b) in July bills. During the hearing, it was informed that consumption of electricity had dropped by 5 percent in May due to weather conditions. It was informed that total demand had been only 17000 MW during the month of May 2024. They further said that more electricity was produced by using LNG rather than local coal. The cost of electricity through RLNG based fuel stood at Rs24.7 per unit.

They said that they had to forecast demand of LNG months ago but sometimes, the consumption of LNG dropped in the power sector that resulted in causing increase in line pack for the gas utilities. During the hearing, an intervener, while pointing towards the high cost of electricity generated through RLNG, said that is it possible to sell the surplus LNG, procured from Qatar under long term contract, in spot market, instead of using it in power generation. Official of CPPA-G informed that the concerned division is considering the proposal and the matter will require the consent of Qatar.

It was informed that the concerned quarters are pondering over a proposal of seeking consent of Qatar to sell LNG being imported on long term contract basis in spot market if there is no demand of LNG in the country. Pakistan had signed LNG supply contract with Qatar in 2016 and revision in price is due in February 2026. Under that deal, Pakistan State Oil (PSO) is bound to take supplies even if country does not have demand. This situation creates results in causing pipeline issues for Sui Northern Gas Pipeline Limited (SNGPL) in case the u tility fails to consume gas. Then the government don’t have other option but to using it in electricity generation, which is the second expensive generation source following RFO.

However, another intervener, who claimed to be the former employee of the Directorate General of Liquefied Gases (LGs) of the Petroleum Division, said that currently no such option of selling the Qatari LNG in spot market exists in the long term contract. During the hearing, the interveners had raised questions over the NEPRA’s role in providing relief during the last five years. An intervener asked that how much relief was provided to the consumers by NEPRA during the previous five years. The speechless regulator ignored the question. Similarly, Nepra was also criticized for depriving the power consumers from the option of paying bills in installment. However, the Nepra did not respond to the question either.

Question was also raised about the scam of coal in Sahiwal coal power plant. The company officials were also questioned how many cases they had lost in the international court. The other question was about the mounting circular debt in the power sector. But CPPA-G refused to respond and asked the interveners to send questions saying that these queries were not relevant to the public hearing. The power regulator had called for producing electricity through coal to overcome loadshedding in month of May. Member Nepra said that consumers on feeders with less than 10 percent losses were also facing loadshedding. The consumers said that electricity prices were so high that they were beyond their affordability. The power regulator had reserved the decision. NEPRA has reserved the judgment and it will be announced later after further scrutiny of the data.