Apr 25 - May 1, 2011

The prime minister has appointed Dr. Asim Hussain, advisor to ministry of petroleum and natural resources despite the fact that Naveed Qamar is heading the ministry. With the controlling power being transferred to Dr. Asim it was also decided to replace the managing directors of oil and gas companies and to also reconstitute the board of directors of the these entities.

The other two strategic decisions were 1) imposition of ban on new connections for six months and 2) to make efforts to enhance supply of energy products. One fails to understand the logic behind these moves, especially because experts have been not only pin pointing the gross negligence but suggesting taking immediate remedial steps.

Soon after the government decided to change heads of oil and gas companies operating in the public sector the announcement also came for the suspension of gas supply to the CNG stations for 36 hours in the franchised areas of Sui Southern Gas Company (SSGC). The suspension has been attributed to reduced gas supply from Bhit gas field, undergoing annual turnaround from 11th April to 4th May. However, the decision raises many questions that include 1) why a need was felt to suspend gas supply of CNG stations after nearly 10 days of commencement of maintenance? 2) What is the logic behind closure of supply to CNG stations for 36 hours at a stretch? 3) Is this suspension tantamount to the contempt of court?

Experts have been saying for years that the energy crisis in the country is not due to any shortfall in supplies but due to rampant theft, gross mismanagement, blatant assassination of good governance and lack of capacity to make timely decisions. Lately, efforts were also made by people having vested interest to create rift among the provinces and also to malign the federation. While it may not be fair to compare performance of SNGPL with SSGC, it seems that SNGPL under some pressure has granted connection new connection far exceeding the availability of gas. Therefore, the blame should not go to the management of SNGPL but to the political elites belonging to PML-N as well as PPP.

Reportedly, unaccounted for gas (UFG) of SNGPL has been hovering around 10 per cent, bulk of which is out right theft. Lately, Chairman APTMA has said that gas pilferage from SNGPL system is as high as 200mcfd. Assuming that the numbers quoted by the chairman are not exaggerated, it is also an act that the theft has not reached this level overnight. There are reasons to believe that this colossal theft is done with the connivance of the staff of gas marketing company. Therefore, experts fear that removal of managing directors and dissolution of boards will only add to the mismanagement, adhoc decision making and upsetting the already defined priorities. Since increasing supply of gas is not possible for the time being, it is feared that existing allocations will be adjusted to oblige the favorites and all others at a disadvantage.

SSGC with the cooperation of the consumers has been managing the shortfall more prudently. It may be recalled that initially SSGC informed the consumers that gas supply from Bhit field, supplying 345 mmcfd would be curtailed up to 60 per cent for 24 days. It had also requested the consumers to contain usage and wastages for avoiding prolonged hours of load shedding. It was also decided that to meet the shortfall of more than 200mmcfd, gas supply to three bulk customers, WAPDA, Fauji Fertilizer and KESC would be curtailed.

With the announcement of gas curtailment by SSGC, KESC on the same day called a press briefing to announce that if gas was curtailed KESC consumers might face up to 14 hours of load shedding. It also claimed that the utility was not getting the agreed supplies. However, it has no evidence to substantiate the claim as KESC and SSGC have not entered into any formal agreement for the enhanced quantity demanded. Therefore, one has all the reasons to believe that SSGC was pressurized not to curtail gas supply of the KESC. This became possible only because SSGC's customers realizing their responsibility curtailed use and CNG station followed closure of stations from mid night to 6.00am

Over the years and especially during present government's regime two factors have become very evident that 1) heads of public sector entities are appointed not because of their merit but because of political affiliation and 2) they are also given the mandate to implement politically motivated decisions and also provide employment to political activists. Therefore, maligning them at this stage is asking for trouble. They can openly say that whatever they did was noting but carrying out of instructions of the concerned ministries, provincial and federal governments.

The successive governments, especially the elected governments have been making adhoc decisions to make short-term gains. While the governments have been very prompt in taking credit of the schemes completed in their regime but initiated by the predecessors, they have also been attributing all the ills to them despite having been in power for years and literally doing nothing.

Energy sector has been the worst victim of myopic policies, adhocism, politically motivated decisions and a source of making quick money. The most talked about scam of the present government is granting permission for establishing rental power plants (RPPs), paying millions of rupees in advance and allocating gas despite being fully aware of the emerging shortfall of gas. Recovery of Rs2.5 billion from RPPs proved the blatant violation of rules. One could find many other violations if probed honestly.