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Increase in demand outstrips production
By Javed Aziz Khan
PESHAWAR – Pakistan is grappling once again with a winter Compressed Natural Gas (CNG) shortage as cold weather has spiked demand by domestic and industrial consumers who are competing with a growing number of CNG-powered vehicles for the fuel.
Driving the problem has been a surge in the number of CNG-fuelled vehicles. Official statistics estimated there were 2.7m such vehicles two years ago, but the number is now closer to 3.5m, said Ghayas Abdullah Paracha, president of the All Pakistan CNG Association (APCA), a retail trade group.
Today, Pakistan leads the world in the number of CNG-fuelled vehicles, estimated at more than 21%.
There were more than 3,329 CNG stations serving those customers in mid-2011, according to the Economic Survey of Pakistan, 2010-2001, which noted that public transportation systems are rapidly converting to CNG.
Demand for CNG has grown 40% annually, while domestic CNG production has increased only 7%, according to government figures cited in media reports.
The combined output of the Sui northern and southern gas pipeline companies, the country’s only CNG producers, is 1,900 to 2,000 m cubic feet (MMCF) per day while consumption is 2,800 MMCF, said Saqib Arbab, deputy chief engineer of Sui Northern Gas Pipelines Ltd. (SNGPL).
"The daily shortfall is up to 800 MMCF that we cover through load management and closing CNG (stations). Our first priority is domestic consumers, followed by commercial units and industry that includes CNG," he said.
Pakistan currently does not import CNG, but the government hopes to announce an import agreement shortly that will ease the crisis.
To deal with the shortage, SNGPL recently suspended deliveries to 551 Punjab CNG stations on orders of the Petroleum Ministry, according to media reports. The APCA claims those stations were opened after 2008, and should be exempt from the shutoff under an agreement.
When the government announced plans to shut down CNG stations for part of each week to ensure enough gas for households, the APCA went on strike January 1, closing all its CNG stations -- idling tens of thousands of cars. After talks between Petroleum Secretary Ijaz Chaudhry and Paracha, the government reduced weekly CNG station shutdowns to two days rather than the planned three days.
Daily operating hours for the stations in Sindh Province and Islamabad have also been restricted, forcing hundreds of thousands of commuters out of their cars.
Khyber Pakhtunkhwa (KP) so far has escaped the shutdown of CNG stations because in 2010 the Peshawar High Court barred CNG supply restrictions, known as “load shedding.” However, CNG shortages, price hikes and other problems are being felt nationwide.
“The gas prices (per kilogramme) for KP are to be further increased from Rs. 74.29 ($0.81) to Rs. 77.25 ($0.85),” the APCA announced in late February. That increase followed one in January, when CNG per kg increased from Rs. 54 ($0.59).
To try to limit the growing demand, the government in December banned the import and installation of vehicle CNG conversion kits.
Efforts to economise thwarted
"The price of CNG is being raised every month. From Rs. 30 (US $0.33) per kg only a couple of years back, now per kg CNG is over Rs. 75 ($0.82), making it almost impossible for middle-class people to bring their vehicles on road,” said Nisar Khan, owner of a CNG station. “The government is almost bringing CNG at par with the petrol, making it impossible for public to have their own cars.”
Rahimullah, a coach driver, switched to CNG to save money.
"A one-way trip from Peshawar to Rawalpindi costs Rs. 2,000 ($22) in petrol and about 900 ($9.90) in CNG,” he said. “This was why people had opted for CNG. If the government (doesn’t) control its price, there will be no incentive for drivers.”
Shortage hurts industry
The shortages extend to households and businesses, not just to motorists. Pakistanis trying to heat homes, hotels and industries are resorting to firewood and other fuels.
Industries have seen their output plunge without gas for their factories. Textile exports fell by 14% and 20% in October and November compared to one year earlier, Arif Tauseef, chairman of the Pakistan Textile Exporters Association, said.
“The gas suspension is foiling all efforts to improve production and exports,” he said. “Instead of short-term solutions, the government should adopt a pro-active approach ... by developing sustainable long-term projects.”
Pakistan’s long-standing power shortages show no signs of abating. Some users have as little as 10 hours of power daily, a source of misery in summer when they lack electricity for fans and air conditioners.
“Nobody knows what will happen in coming months,” complained housewife Sobia Karim. “Until 2009, there was only electricity load shedding ... but the gas supply was much better. Today, we don't find power and gas anywhere for most of the time.”
It could take six months for the situation to improve, Pakistani Petroleum Minister Dr. Asim Hussain has hinted.
In an effort to deal with the CNG shortfalls some motorists have converted their cars back to gasoline, or made them dual-fuel.