INTERVIEW WITH MAHFOOZ URSANI, VICE PRESIDENT CNG DEALERS' ASSOCIATION (SINDH)

KHALIL AHMED
(feedback@pgeconomist.com)

Feb 6 - 12, 20
12

Mahfooz Ursani is an electrical engineer. He graduated from Mehran Engineering University of Engineering and Technology, Jamshoro in 1989. He also did business in agriculture, construction and gas sector. His hobbies include inventions and flying ultra lightweight aircrafts. He has also worked with many NGOs related to water and power issues of Pakistan. He represents agriculture and CNG sector in many committees of Government of Pakistan and government of Sindh. He is associated with Pakistan Engineering Council, Institute of Engineers Australia, Sindh Abadgar Board and Sindh CNG Owners Association (ScngA). Currently, he is elected Chairman Technical Committee of ScngA.

PAGE: YOUR VIEWS ABOUT OIL AND GAS SECTOR OF PAKISTAN.

MAHFOOZ URSANI: God has gifted Pakistan with petroleum and gas reservoirs mainly in Sindh and Balochistan. The quantity produced does not meet the overall demand of the country. We thus import all the petroleum products including Octane (petrol), diesel, kerosene, liquefied petroleum gas (LPG), tar coal and other petrochemicals including plastics and PVCs.

Our natural gas (commonly known as Sui gas) is also mined from different wells and transmitted into national gas pipeline system to deliver it to the doorsteps of consumers. Natural gas consists of mainly three combustible gases butane, propane and methane. Butane and propane is extracted at the first stage to manufacture LPG and only methane, which is a lighter and dry gas, is pumped into the transmission line. This gas is color less and odorless and to make its leakage detectable, a pungent smelled chemical is added before it reaches the user to make it safe. Natural gas is a economical and clean fuel and very convenient in use.

Pakistan first gas field was discovered in Sui Balochistan in 1952. Commercial exploitation of the field began in 1955 with the total estimated reserves at about four trillion cubic feet. In the beginning most of the gas was supplied to domestic consumers but with the passage of time, it was converted to power generation and fertilizer production. Industries like cement, textile, foundries, sugar mills etc also adopted and preferred this fuel. Recently, after the global petroleum crises in early 2000 where petroleum hit $180 per barrel, natural gas became popular as auto gas (CNG) in most countries of the world.

Today, Pakistan ranks No. 1 country in CNG use as auto gas. It is supplied through more than 3500 CNG stations nationwide. Vehicles utilize 7.4 per cent of total gas production of the country to run their engines. Though many more gas fields were discovered and exploited after Sui field, the consumption grew even faster hence the demand and supply gap widened. Today, there are numerous issues pertaining to this sector ranging from under exploration, unnecessary closure of different oil and gas fields, law and order situation in Balochistan, corruption in SSGC and SNGPL, gas theft and bad governance.

PAGE: HOW WOULD YOU COMMENT ON THE CURRENT WEEKLY CLOSURES OF CNG STATIONS?

MAHFOOZ URSANI: Sindh produces 72 per cent, Balochistan 20 per cent and Punjab and Khyber Pakhtunkhwa produce the remaining eight per cent of total gas. There are about 700 CNG stations in Sindh, 25 in Balochistan, 2400 in Punjab and 400 in K.P. Sui Southern Gas Company (SSGC) supplies gas to Sindh and Balochistan while Sui Northern Gas Company (SNGPL) is responsible of gas supply in other two provinces including Islamabad. Just like proportion in CNG sector, the Northern system with all its other bigger sector consumes 70 per cent of total gas production nationwide. Naturally, SNGPL has three times bigger system and infrastructure. In winter, Punjab and K.P face extreme cold weather resulting in sharp increase of gas usage for heating purpose. It is not viable for it to lay down bigger capacity gas transmission pipes only for winter demand as in summer the demand drops drastically comparatively. So, it is actually the line capacity of the company, which created the shortfall during winter every year. While SSGC has no such issue and we heard no cry till this winter. Now, suddenly CNG stations are forced to close every week for one day or two throughout Pakistan through load management plan. This is absolutely unnecessary specially in SSGC system. This creates more pain to already suffering people. Private, public, hospital and school transport are affected. Less economic activity has been witnessed on the day of gas closure to CNG stations. People have no other choice left after diesel and petrol has become so expensive and is beyond reach of many. I as a CNG station owner feel so uncomfortable when I see long lines of vehicles hour before closure of stations and hour before reopening time. I wish people should have another option like cheap diesel or higher income to afford the petrol.

PAGE: IT IS BEING SAID THAT THERE IS HUGE POTENTIAL FOR INVESTMENT IN THE CNG SECTOR AND THE DEMAND IS ALSO EXPECTED TO GROW. YOUR VIEWS.

MAHFOOZ URSANI: CNG has become the backbone of the economic activity as industrial logistics, private and public transport including school vans and ambulances are now dependent on this pocket friendly fuel having no other alternate. Today, CNG substitutes about 3.44 billion liters of petrol per annum reducing the trade deficit by saving two billion dollar. CNG sector pays the highest tariff for sui gas among all sectors. It also contributes Rs32 billion in terms of taxation towards national exchequer. Total investment in CNG is to the tune of Rs185 billion. As per WHO report, the use of CNG has significantly reduced the pollution in Pakistan with decline in respiratory and skin diseases. The CNG sector has also emerged as a big employment sector with around 400,000 direct or indirect employees.

It is obvious that even without any support from the government this indigenous industry has thrived with so many positive aspects. I do not understand that why the government has developed allergic like symptoms with CNG sector. It is not in favor of the investors, the people, the government, and the country to have negative sentiments against CNG. Yes if there are any irritant, one should think and plan to remove those.

PAGE: YOUR VIEWS ON THE TARIFFS ON CNG SECTOR.

MAHFOOZ URSANI: The tariff of CNG is highest by SSGC and SNGC i.e. Rs571.88 per mmbtu, while industrial tariff is 434.18 per mmbtu and residential 256 per mmbtu. The petroleum policy 1994 states that CNG tariff shall be applied equivalent to the industrial tariff. Further, government has imposed petroleum development levy on CNG, which is unlawful, unconstitutional and illogical and is also condemned and rejected.