• 120,000 connections for LNG-based piped supply planned in first year
• Move comes amid push to address continuing glut in gas network

ISLAMABAD: The government is almost set to allow new gas connections at the price of imported LNG — around Rs3,900 per million British thermal unit (mmBtu) at the current rate — and almost four times the current connection fee.

Sources told Dawn that a summary has been moved by the petroleum division to the federal cabinet for lifting the ban on new connections, with a first-year target of 120,000.

Priority would be given to applicants who had previously been issued demand notices or had paid the urgent fee but could not get connections because of a subsequent ban. The number of new connections would be enhanced for next year.

Around 250,000 applicants fall in this category, who would have to file affidavits not to approach the courts for their past claims and the connection fee increase. Before the ban, consumers were allowed to pay an upfront fee of Rs25,000 to secure a connection on a priority basis, unlike the routine Rs5,000-Rs7,500 fee. On the other hand, a new LNG connection earlier cost Rs15,000.

At present, more than 3.5 million applications for new connections are pending with the gas companies. While new connections provide an additional avenue for the gas companies to claim a guaranteed return on fixed assets (pipelines and related infrastructure), this also leads to higher gas........

© Dawn Business