PEW rejects government's LPG import plan

The Pakistan Economy Watch (PEW) on Friday rejected the government's plan to import 15,000 tons of Liquefied Petroleum Gas (LPG) a month during winter. According to press handout, the import of 75,000 tons of LPG, which will continue from November till March to reduce the shortage of natural gas, was aimed at personal welfare while masses would have to bear the burden of extraordinary bills.
The think-tank said that top managements of Sui Southern Gas Company Limited and Sui Northern Gas Pipelines Limited had been directed to buy 500 tons of LPG each from Saudi Aramco to be added in the gas system after mixing air in it. Similarly, the SSGC and SNGPL, which would buy 250 tons of LPG each, had been directed to make a deal through a broker, top officials in the Ministry of Petroleum and Natural Resources told SVP of PEW Abdullah Tariq.
The current Aramco Contract Price (CP) for LPG was $946 per ton while bringing it to Pakistan will cost another $150 per tonne excluding taxes and other expenditures. The move will cost the masses Rs 50 million per day for five months or Rs 7.8 billion in total.
Sources further said that the broker with whom deal "is almost final" would have to pay a commercial bribe of $25,000 dollar (Rs 2.3 million) per day which will be deposited in an offshore account of a politician. If the supply continued for five months, total kickbacks paid by the Saudi broker will be around Rs 3.5 billion. Abdullah Tariq said that the government and private companies were extracting 1,100 tons of LPG from all oil and gas wells in Pakistan. On the other hand, he said, the government's plan to import LPG "will jack up the cost of gas for the masses".
"Theft of gas had surged to as much as 12 per cent of total production or around 504 tons. This is the same amount of gas government wants to import but it would not stop leakage." The price of local gas is $6 per British Thermal Unit (BTU) while the cost of imported LPG stands at $24 per BTU. At present, the country's total production of gas stands at 4,200 mmcfd (million cubic feet per day), while the demand in winter touches 5,900 mmcfd mark, the PEW office-bearer said.-PR