Spot LPG cargoes: Govt decides to exempt SLL from PPRA rules

ISLAMABAD: The government has decided to exempt SSGC LPG Limited (SLL) from PPRA Rules for procurement of spot LPG cargoes from April 2023 to March 2024, official sources told Business Recorder.

Ministry of Energy (Petroleum Division) in its letter of April 5, 2023 requested PPRA to grant exemption to SSGC LPG Ltd. (SLL) from Rule 35 & 40 of PP Rules, 2004 for the import of LPG spot cargoes from April 2023 to March 2024 (approx.) - 20,000 MT LPG, i.e., four cargoes per month. SSGC LPG Pvt. Limited stated that in September 2022, Ministry of Energy (Petroleum Division) had given a task to both the SSGC (through its subsidiary SLL) and SNGPL to import additional LPG during winter season from November 2022 to March 2023 to overcome the severe gas shortages in Pakistan.

SLL in response imported 67,771 MT LPG during last winter season (due to exemption provided from Rules 8, 9, 13(1), 35 & 40 of PP Rules, 2004).

November 22 to March 23: SLL spot cargoes to be exempted from PPRA rules

The regular LPG supplies to the local market not only helped avoid the artificial shortage of the product but also maintained the LPG prices well within OGRA announced limits.

The sources said, SSGC LPG Pvt. Limited further submitted that LPG prices, locally, as well as, internationally, are vulnerable and change on a daily basis. Following are the benefits of the exemptions allowed to SLL from PPRA Rules, 2004: (i) exemption from Rule-35, of PP Rules, 2004, gave SLL an opportunity to procure LPG from international suppliers at par with the private importers as it reduced the risk of price change for both SLL and the international suppliers; and (ii) exemption from Rule-40 of PP Rules, 2004, provided an opportunity for SLL to get the market competitive prices from these suppliers.

The sources further stated that SLL with the help of existing exemptions saved around $918,600 amounting to around Rs222 million in 12 consignments during last winter season. In this regard, SSGC LPG Pvt. Limited stated that in order to import LPG smoothly and cost-effectively, SLL needs to remain at par with the private importers.

SLL, with the help of the exemptions of Rules 35 & 40of PP Rules, 2004, will be able to continue the uninterrupted supply to the local market to avoid product shortages and keep LPG prices well within OGRA announced prices.

Ministry of Energy (Petroleum Division) highlighted the fact that the dependence on LPG imports is/ will keep rising in future due to increasing demand coupled with reduction in local LPG production due to depleting local oil & gas fields. In this regard, Ministry supported the stance of SSGC LPG Pvt. Limited.

Petroleum Division, in its summary to the PPRA stating that in accordance with section 21 of the PPRA Ordinance, 2002, on the recommendation of the PPRA Board (66th meeting held on October 10,2022), the Federal Government on October 19, 2022, granted exemption to SSGC LPG (Pvt.) Limited (SLL) from applicability of Rules 8, 9, 13(1), 35 and 40 of the PP Rules, 2004 for import of LPG Spot Cargoes from November 2022 to March 2023 for approx. 20,000MT per month.

Copyright Business Recorder, 2023