Grilled by the Senate Standing Committee on Petroleum on LPG Policy 2011, perturbed Petroleum Minister Dr Asim Hussain offered to bare all in a closed door meeting. The meeting of the committee was held under the chairmanship of Senator Sabir Ali Baloch. The committee had sought comprehensive briefing from the ministry on LPG Policy 2011 and pricing formula. The committee had also invited LPG producers to listen to their concerns on the pricing, levy and policy.
NOT SATISFIED
The committee was not satisfied with the petroleum ministry’s claims that new LPG policy was required to end cartelisation and promote imports to end energy crisis. Senators kept asking the minister who was stopping implementation on policies. Briefing the committee, the minister said, “LPG imports were necessary as there was no more gas available which could be provided through pipeline. The only available option is LPG for which we are making efforts”. He said state owned Sui Southern Gas Company had bought ProGas terminal for LPG imports and have directed other public sector entities to reenter the LPG and extraction and marketing business but his efforts were being hindered. “I don’t want to name people but if you desire we should have a closed door meeting.”
HINDERING IMPLEMENTATION
He said there were 11 local LPG producers who had formed a cartel and were hindering implementation on the new policy. Local refineries produce 42 per cent, while 41 per cent is directly produced on the gas fields and 17 per cent by one extraction plant. He said due to cartelisation local production has declined from 1600 tonnes per day to 933 tonnes per day. He alleged that if any investor imported LPG the local producers reduced their prices to retain their hold. “We want all LPG to be bought by the government and then determine a price on its weighted average.”
WHERE’S THE PROOF?
Safdar Ali Abbasi of PPP asked the minister to prove his claim by providing accurate data as the documents provided by the ministry did not contain any details. He said the policy was drafted without consulting the stakeholders. He said OGRA should be activated to check artificial price hike. Pervaiz Rashid of PML-N said government was attempting nationalisation of LPG sector that would not be allowed as it had miserably failed to operate railways, airlines and steel mills. However, the minister said that he never used the word nationalisation and only said that the role of public sector must be encouraged to develop the sector.
WHY THE HIGH MARGINS?
Senator Haroon Akhtar Khan of PML-LM asked why local producers were getting high margins, on which the minister said that the price was determined by them and there was no role of regulator. New policy was being brought to specifically address the issue and impose a levy on their windfall profits but the policy now stands suspended. The minister left the meeting after receiving a message from Prime Minister for a meeting. Chairman Sabir Baloch said the minister and secretary had left the meeting and the committee should meet again to discuss the issue. However, Pervez Rashid said the committee should listen to the point of view of private sector. Jehangir Bader said the chairman was not aware of the issue and was attempting to favour the minister. He said the ministry should provide complete details to the committee on the basis of which they drafted the new policy.
WHAT’S STOPPING THE GOVT?
Iqbal Z Ahmad of Associated Group challenged the minister’s statement and said that the public sector entities controlled 70 per cent share of locally produced LPG. What was stopping the government from acting against cartelisation? He said their image was being tarnished through statements and if the minister or ministry has any details on their malpractices it should be shared with the committee to ascertain the truth. He said the decision given by Competition Commission of Pakistan against LPG producers was dismissed in five minutes by the high court. He said previous chairman of CCP was prejudice against them and was not ready to listen to their argument. Senator Haroon Akhtar Khan said statements of the minister and stakeholders were entirely contradictory. He proposed that the ministry should present them complete data and details about LPG sector so that they could finalise their recommendations. The committee was adjourned to meet next week.
