The Ministry of Petroleum and Natural Resources has moved draft of LPG (Production and Distribution) Policy 2012 to Economic Co-ordination Committee (ECC) of the Cabinet for approval that allows the use of LPG in LPG Mix Plants and in auto sector. The summary exclusively available with the Business Recorder states that use of LPG in LPG air mix plants and in auto sector would be encouraged.
Ministry of Petroleum and Natural Resources has drafted LPG (Production and Distribution) Policy 2012 with a view to addressing various issues that could not be covered in the previous LPG policies to encourage LPG industry for sustainable and enhanced availability of LPG products.
The objectives of the LPG (Production and Distribution) Policy 2012 are to incentivise the LPG industry for enhancing local LPG production as well as import of LPG and its utilisation in the automotive sector and in LPG air mix plants for provision of gas to consumers. To achieve these objectives, various issues regarding LPG production, LPG licensing, safety standards, pricing, use of LPG in automotive sector, provision of air mix LPG to reduce pressure on existing gas system, import and export have been addressed in the policy.
Some of the important aspects which were put in the summary for the consideration of ECC included; the requirement of prior long-term arrangements for availability of LPG has been dispensed with. The policy also address the producers of gas who fail to set-up LPG extraction plants within the stipulated time as given in the development plan will forfeit their right of extraction in favour of government. Other main points of draft include public sector producers will sell their LPG to Sui Companies for use in LPG Air-Mix plants.
International safety standards ''NFPA-58'' or equivalent has been introduced for storage, cylinders, bowzers and distribution outlets. Compliance monitoring system will be put in place through the regulator and HDIP or other third party authorised inspectors would conduct inspections. Price of LPG supply chain would remain deregulated.
To ensure that cartels are not formed and high consumer price of LPG is not charged. Ministry of Petroleum and Ogra will determine the quantity of LPG to be imported to meet the gap between demand and supply. The government may use the petroleum levy fund to subsidise LPG prices to provide benefit to public. The ministry hopes that the policy would increase the supplies of LPG, its share in country''s energy mix, help in reaching far flung areas of the country in provision of energy in the form of LPG air mix, enforcing stringent safety measures by adoption of international standards, prohibition of illegal activities like cross filling and decanting, encouraging healthy competitive environment under complete price deregulation regime, encouraging investment in infrastructure and development of LPG auto gas sector in the country.
The ECC of the Cabinet in its meeting held on August 23, 2011 approved the LPG (Production and Distribution) Policy 2011. Before the policy could realise its objective and give some fruitful results, some of the marketing companies filed writ petition in Lahore High Court, Lahore whereby the operations of the policy were suspended especially some sections. The matter is still sub judice in the court. In view of the increasing demand of energy especially gas, it is essential to enhance its availability in the country. The current production of national gas from indigenous sources is around 04 BEFD whereas its demand has far exceeded 06 BCFD. Under these circumstances there is dire need for diversification to other sources including LPG so that heavy dependence on the natural gas can be minimised. Accordingly, the ministry has drafted the policy to encourage use of LPG in mix plants and in auto sector.
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