ISLAMABAD: The federal government has decided to apply uniform costing criteria for natural gas consumers living within a five-kilometre radius of gas fields in the four provinces without putting additional burden on provincial governments.

The federal government is likely to meet the additional cost most probably from funds allocated for commitments made regarding the Sustainable Development Goals, Energy for All and Gas Infrastructure Development Cess initiatives under the Public Sector Development Programme.

A government official told Dawn that the federal government initially wanted the provinces to subsidise each other, with three of the provinces mainly bearing the additional burden of Balochistan through a uniform rate in order to compensate for the decades when the province supplied gas to the national system.

However, the provinces turned down the request during recent meetings of the Council of Common Interests (CCI) and the Inter-Provincial Coordination Commit­tee (IPCC) and instead complained about non-implementation of Article 158 of the Constitution by the federal government.

At present, the criteria for provision of natural gas to consumers within five kilometres of the well-head vary due to several reasons, including maintenance cost of pipelines. The cost is borne by the gas utilities — Sui Northern Gas Pipelines Ltd and Sui Southern Gas Company Ltd — but the provincial and federal governments, depending on their political compulsions and interests, are required to provide additional funds in case the cost gets higher than expected.

Under the criteria approved by the Prime Minister Office and the Oil and Gas Regulatory Authority, the cost of a new connection is Rs54,000 in Punjab and Sindh, Rs108,000 in Khyber Pakhtunkhwa and Rs207,000 in Balochistan.

It has been estimated that an amount of Rs5.89 billion will be needed this year to provide gas to the people living in areas where new gas discoveries have been made. The two gas utilities say they have no more than Rs2bn to set aside for new connections under the existing criteria and the federal government wants the provinces to foot the additional amount of Rs3.89bn and the federal government may contribute funds in some cases.

Because of resistance from Khyber Pakhtunkhwa, Punjab and Sindh, the federal government was compelled to give an undertaking to the CCI that it will bear the additional cost under the uniform cost criteria for provision of gas to consumers living within 5km of new gas fields. The provinces and the gas companies have been directed to work out a uniform rate for the four provinces.

For the current year, the government has allocated Rs30bn for community development schemes spent through politicians under the PM’s Sustainable Development Goals, Rs12.5bn for Energy for All and Rs25bn for GIDC initiatives.

At a recent meeting of the IPCC, Sindh and KP expressed concern over non-implementation of Article 158 of the Constitution. The article requires that “the province in which a well-head of natural gas is situated shall have precedence over other parts of Pakistan in meeting the requirements from that well-head, subject to the commitments and obligations as on the commencing day”.

The chief ministers complained that the article was very clear, but “somehow it was not being implemented despite the fact that KP, Sindh and Balochistan were in agreement on this issue”.

The Sindh chief minister is reported to have told the federal government that if the matter is not resolved, the provinces will be forced to move courts.

Published in Dawn, October 16th, 2017