Govt eyes new gas levy amid paradox of glut and rationing

As the Lahore-based Sui Northern Gas Pipelines Limited (SNGPL) continues, even in summers, with unannounced rationing of natural gas amid ongoing infighting over pipeline capacity allocation to a third party, the government is expected to impose a captive gas levy on gas distribution by the power sector to ensure a level playing field for public and private sector gas suppliers. This is despite the fact that Pakistan officially suffers a severe natural gas and LNG supply glut, compelling the government to seek postponement of more than 170 LNG import cargos and SNGPL forcing local gas producers to shut down their fields or scale down production. This causes substantial losses, not only to local producers like state-owned OGDCL, listed at the London Stock Exchange, but also erodes the country’s foreign exchange and forces consumers to pay high fixed charges for gas they receive for only a few hours a day.