Rupee depreciation to push POL prices: Petroleum Minister

As the government’s technocratic finance team remains busy in Washington briefing minions of International Monetary Fund (IMF) about their plans on pursuing revenue and power sector reforms even after willfully exiting from the Fund stabilisation programme, the Petroleum Minister Dr. Asim Hussain on Tuesday expressed serious concerns over the sudden jump of Rs4 in US$ against the Pak Rupee that would lead to a significant increase in petroleum products in the country.
The minister said this while briefing the National Assembly Standing Committee on Petroleum that was held under the chairmanship of Sardar Talib Hassan Nakai on Tuesday.
He said that the sudden increase in the dollar value would result in a significant increase in the domestic petroleum product prices that would increase burden on CNG. People would be rushing towards CNG instead of petrol that would further stress the declining gas supplies. However, he said that the load shedding for CNG sector would not be increased from the present level and price parity of 55 per cent between natural gas and petrol would be maintained. Seeking support from the committee, he said they have asked Prime Minister to shift the Oil and Gas Regulatory Authority (OGRA) and the explosives wing of the Ministry of Industries under the administrative control of the Ministry of Petroleum. He said that it would help put an end to all malpractices in OGRA and explosives wing. The committee unanimously recommended placing OGRA and explosives wing under the administrative control of Petroleum Ministry.
The minister said that gas theft act needs to be approved immediately from the parliament as without sentencing a few influential people the rampant gas theft could not be curtailed. He said that if the measures to change the fuel mix were not supported by the parliamentarians, the natural gas supply system could choke any time. “We will then have to do load shedding even for the domestic consumers”. Explaining the reason for buying, Progas, he said the move was made as the powerful cartel of Liquefied Petroleum Gas (LPG) wanted to fleece the consumers by manipulating LPG demand and supply. Progas, a private sector company having LPG import terminal was purchased by the public sector Sui Southern Gas Company Limited (SSGCL) by giving Rs1.8 billion bid. He said that Sui Northern Gas Pipelines System Limited (SNGPL) should also have a stake in the project. “There is no alternate other than to import LPG for domestic, commercial and industrial usage”.
LPG mafia, he said was lobbying to derail the LPG policy, as they know re-entry of public sector companies would end cartelisation. The public sector companies could start their LPG business within 30 days. He said the imposition of levy on LPG would contribute Rs5 billion to the exchequer that would be utilized for developing energy infrastructure. He said that the Finance Ministry had been asked to open an account for gas infrastructure surcharge as the current gas development surcharge was not being utilized by provinces for the desired purposes. He alleged that the same LPG cartel was also trying to create hurdles in Liquefied Natural Gas (LNG) imports. He said they plan to complete lying of a dedicated pipeline from Karachi to Lahore to directly transmit LNG from port to Punjab. He said permission for LNG import would be given to multiple parties but the final award would go the party that brought in the LNG within the allocated time. “I want LNG flowing to Punjab before winter next year”. Briefing the committee on the under consideration lucrative new petroleum policy, the minister said that the era of discovering conventional natural gas was over and the focus was on shale and gas. He said the focus was also on offshore discoveries and a bonanza of $2 per barrel would be given to the first three discoveries.
Briefing the committee Chairman of LPG Distributors Association of Pakistan (LPGDAP) Irfan Khokhar said that the LPG cartel had fleeced the people of Rs350 billion during the 7 year period (2004-2011). He stressed that all the illegally granted quotas to generals, politicians and other influential people should be discontinued and illegally fleeced money should be recovered from them. He said that the LPG policy could be only successful if fully implemented by the Oil and Gas Regulatory Authority (OGRA). Earlier briefing the committee Acting Managing Director of Oil and Gas Development Company Basharat Mirza said that the company had curtailed its exploration budget due to the circular debt. He said that the company was focusing on Balochistan to meet the increasing oil and gas demands of the country.