The Senate Standing Committee on Petroleum and Natural Resources is not satisfied with the claims of the petroleum ministry that new LPG policy was required to end cartelisation and promote imports to bridge the energy demand and supply gap, directing the ministry to provide complete data on the basis of which it drafted the new LPG Policy 2011.
The committee held a meeting with Senator Sabir Ali Baloch in the chair, here on Friday. It sought comprehensive briefing from the petroleum ministry regarding the LPG Policy 2011. The members of the committee, while showing grave concern over the LPG Policy 2011, asked Dr Asim Hussain Minister for Petroleum, why his ministry didn't consult the LPG stakeholders before formulating the policy.
The LPG Policy 2011 at present is suspended due to a stay order by the Lahore High Court (LHC). The minister said that under the policy a Petroleum Levy of $120 per ton would be imposed on local LPG so that the local commodity prices could be brought at par with international prices.
The meeting was informed that during last six year, local LPG production has declined from 1,800 tons per month to 1,000 tons. The production of Jamshoro Joint Venture Limited (JJVL), the largest producer of LPG in private sector, has declined from 480 tons per month to 140 tons. The meeting was informed that import and promotion of LPG in domestic sector is only solution to resolve the current natural gas crisis and the Petroleum Ministry is making all-out efforts to achieve the goal.
The minister informed the committee that Sui Southern Gas Company Limited (SSGC) has purchased Pro-gas terminal at Port Qasim to start the business of LPG. He said that both public gas utilities would start LPG business through opening of LPG outlets countrywide.
Dr Hussain told the committee that the new LPG policy was required, as there was no gas available in the country to tackle the energy shortage, promoting use of LPG was a must. He said there were 11 LPG producers who had formed a cartel and were hindering LPG imports. He alleged that if any investor imported LPG they would reduce the prices of locally produced LPG.
Iqbal Z Ahmad of Associated Group challenged his statement and said that the government controlled 70 percent share of locally produced LPG and private sector could not manipulate the market. The petroleum minister said that he would reveal names of all the people hindering LPG policy in a closed-door meeting.
Senator Safdar Abbasi said the policy was drafted without consulting the stakeholders. Senator Pervez Rashid said that the government was trying to nationalise the LPG sector. However, petroleum minister said that he never used the word nationalisation and only said that the role of public sector was vital to develop the sector. Senator Haroon Akhtar asked why local producers were getting low LPG prices, on which the minister said that the new policy was being bought to address the issue to bring the price of local LPG at par with international price that will enable imports, otherwise, there was no chance of import. The minister left the meeting after receiving a message from the Prime Minister for a meeting.
Chairman Sabir Baloch said that the minister had left, hence the committee meeting should be held some other time. However, Pervez Rashid said that the committee should listen to the point of view of private sector. Jehangir Badr said that the chairman was favouring the ministry. Iqbal Z Ahmad said that the ministry was blaming them for cartelisation even though the government was attempting to increase LPG prices through new policy instead of decreasing them. He said they will present the true picture of LPG's pricing mechanism to the committee.
Senators expressed concerns that the ministry and private sector, LPG producers were giving different perspectives of LPG issues and they have no data to ascertain who was telling the truth. Senator Jehangir Badr said, adding that the ministry should first provide them the data to know why new policy was required.
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