Diversifying gas distribution

THE Oil and Gas Regulatory Authority (OGRA) has issued the first-ever private sector distribution licence for natural gas sales in Sindh. The Karachi-based firm — Gaseous Distribution Company (GDC) — will be the first company ever to share the decades-old pipeline network of SSGCL.
This is a step in the right direction and hopefully would help some of the difficulties and problems that the gas consumers face at the moment in the absence of any competition. Sui Northern Gas and Sui Southern Gas companies enjoy complete monopoly in their respective regions and as a consequence there is no incentive for them to invest in improvement in distribution network, modernisation or consumer facilitation. The ratio of unaccounted gas is alarmingly high and burden of leakage and theft is shifted to honest consumers. There are also reports of rampant corruption in both the companies and the situation is not improving despite tall claims made by Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi. The Minister surely deserves credit for taking steps to address critical gas shortage and successfully concluded a state-to-state deal with Qatar and that too on highly competitive rates but he has not been able to introduce transparency in the working of the two gas companies that are fleecing consumers because of corruption and inflated bills. Licence to new company has been granted just for purchase and sale of liquefied natural gas (LNG). We would, however, propose that more distribution companies should be allowed with permission to acquire natural gas and its distribution to consumers through their own networks. The possibility of bifurcating SNGPL and SSGPL regions into further sub-regions and establishment of separate distribution entities for these sub-regions may also be considered.

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