Recently, the Oil and Gas Regulatory Authority (OGRA) increased the prices of gas for different sectors/ consumers with effect from January 1, 2010. OGRA issued two notifications: first on December 31, 2009, which was somewhat confusing for the consumers, and the second one was issued on January 8, 2010, in clarification of the previous one.
In its first notification, the authority did not include minimum charges (the charges for only being connected to the gas supply) for the consumers including domestic, commercial, industrial, CNG stations, cement factories, WAPDA and KESC power stations etc; the minimum charges to be paid by all these consumers were elaborated in the second notification. The said price-hike was to increase the revenue of Sui Northern Gas Pipelines Limited and Sui Southern Gas Company Limited as the global lenders demand the government keep the revenue of the two gigantic gas distributors at a certain minimum level.
According to the notification, minimum charges for domestic consumers are Rs 128.15, while the commercial users are bound to pay Rs 2,189.28 per month. These commercial users include clinics, cinemas, laundries, barber shops, tea-stalls, milk shops, bakeries, cafes etc. Similarly, the industrial sectors are bound to pay Rs 12,893.23 as minimum charges per month. While the CNG stations, cement factories, the independent power producers (IPPs) and captive power would pay Rs16,982.44, Rs 1,8087.77, Rs 11,206.98 and Rs 12,893.29, respectively. There was a total increase of Rs 3,000 in the minimum charges paid by the consumers compared with the June 30, 2009 notification (See table).

OGRA also fixed the sale price of natural gas, sold by Pakistan Petroleum Limited to WAPDA gas tribune power station, Guddu, for Rs 380.41 and Rs 369.97 per mmbtu, respectively.
This recent across-the-board increase of 18 per cent has come as a shock to the end-users, who happen to be the masses in all cases. Commercial, industrial and transport sectors would be ultimately passing the price-hike on to the common man. Domestic, industrial and transport sectors are the main consumers that use more than 90 per cent of the gas supply.
The transport sector consumes gas in the form of CNG as a fuel. Pakistan has the world’s highest number of CNG vehicles i.e. over two million, and has the world highest number of CNG refuelling stations i.e. 2,941 as of July 29, 2009. The main reason is because gasoline (petrol) prices in Pakistan are the highest in the region. So during recent years, our transport system has fast switched over to CNG, putting great pressure on our meagre recoverable gas resources. Discouraging use of this green source of energy through a price-hike is a foolish idea, especially when oil prices have started escalating again. The current CNG crisis in the Punjab and in the NWFP is handled through restricted supply which is not a long-term solution.
Due to faulty planning, the gas sector is on the verge of collapse and if the ongoing decision would not be withdrawn, then the import bill of oil will swell, as CNG is presently replacing at least 3.7 billion litres of petrol per annum again a burden on an already deficit budget.
The industrial sector is the second largest sector of Pakistan's economy in terms of output and employment. However, due to so many adverse factors, both domestic and external, presently the sector is passing through a decline. And this decision is adversely affecting the already fragile sector. The sector has already been destabilised by the weakness in domestic demand, worsening power shortages, structural problems, deterioration in the law and order situation and decline in external demand emanating from the global recession. In this situation, the suspension of gas supply to industries for two days a week is beyond one's comprehension. Non-availability of electricity and gas has destroyed the industrial base, but the government is playing the role of a silent spectator. The industrial area which was the hub of production, is presenting a deserted look as a large number of industrial unit has stopped production.
The government, to tackle the problem of gas shortage, is also on the way to implement the risky project of the IPI (Iran-Pakistan-India) gas pipeline. The IPI, being a doubtful starter, entails huge economic and political costs to the country. This project will benefit the seller Iran and the buyer India, chiefly. Although, Pakistan will be able to purchase 750 million to one billion cubic feet per day of gas but it would give another opportunity to our adversary, India, to trigger terrorism in the country so as to gain political mileage. The Iranian request, clearly made at India's behest, for a guarantee by Pakistan to ensure uninterrupted gas supply to India, is a trap to undermine Pakistan's interest. This should not happen. The circumstances we are in, it has become difficult to safeguard even our own installations, then how can we secure the IPI gas-line coming from Iran.
Within a short period of two years, the change of an autocratic government to a democratic one, has played havoc with the common man. Be it natural gas or CNG, vested interests have taken to the arena to extract maximum financial gains with little concern for the economic crisis. This greed game is going to exacerbate the situation.
This country is blessed with precious natural gas reserves but, unfortunately, due to mismanagement, it is being wasted. During the last financial year, the SNGPL and the SSGCL recorded a revenue loss of around more than three billion rupees, as per the OGRA annual report.
The reserves could be of good use for the people and for the economy of the country. If the criminal waste of the gas treasure is not checked immediately, the entire reserves will deplete within the next two decades, leaving nothing for the coming generations.
What is mandatory is steadfast exploration and development of Pakistan's depleting gas resources. This can be achieved by attracting local and foreign investments in this sector having a huge potential.