There would be an increase of around 90 percent in the production of liquefied petroleum gas (LPG) in the country during the next three months which would save $100 million annually, highly placed sources of the Oil & Gas Regulatory Authority told the Business Recorder here on Tuesday.
They said that at present daily production of LPG from various gas fields and oil wells is about 950 metric tons while the country's daily consumption of LPG was 1000 metric tons.
The sources added that gas fields of Oil and Gas Development Corporation, O.P.I. and Jamshoro Joint Ventures in NWFP and Sindh would start daily production of 800 metric tons of LPG which would not only meet the present requirements but also enable us to issue more licenses for distribution of LPG in far flung areas of the country.
According to the sources, the price of LPG was linked with the international oil market. Therefore Oil & Gas Regulatory Authority has no control over the LPG prices in Pakistan.
They admitted that as compared to the LPG prices of June 2003, there was an increase of 45 percent in June 2004. Presently, the price of LPG is $346.5 per metric ton whereas in May last year it was $220 PMT.
The main responsibility and mandate of Oil & Gas Regulatory Authority is to issue licenses to private parties for supply of LPG to consumers and setting up of CNG filling stations in the country, the sources said adding that Pakistan had become the third biggest user of CNG. At present CNG is being provided at 560 filling stations in the country.
They said that with the unaffordable increase in the oil prices, the lower and middle class owners of cars are converting their cars into CNG. The demand is so high that Ogra has issued 483 licenses for CNG pumping stations in one year. Similarly, the demand of LPG was also increasing, as it is a clean and environment-friendly fuel.
88 private parties have got the license for the distribution of LPG in the country. The Ogra has simplified the procedure and requirements for getting a LPG license.
Anyone having a capital of Rs 3 million with suitable logistic arrangements and infrastructure could apply for the license. Likewise, procedure of license for a CNG pumping station had also been made simple. The sources said that Ogra does not take months now but days to issue the license.
The sources told this scribe that the federal government had bifurcated the policy and regulatory affairs in 1999, elaborating that the policy of energy sector is still in the hands of the government but it has de-linked itself from the regulation of prices, they observed.
They said that the Ogra is the watchdog of interests of both the investors and the consumers. Whereas, Ogra wants that the investors get fair return of their investments and hard work, it also ensures protection of the rights of the consumers of LPG and CNG.
They disclosed that Ogra had written to the Provincial governments that the law enforcing agencies should take necessary measures ensuring that LPG cylinders are not used in the cars and other vehicles causing fatal accidents, whereas there had not been a single case of accident in CNG fitted cars.
The sources said that it was policy of the government that at least 20 percent of the available LPG should be supplied to Azad Kashmir and Northern Areas, so that our precious forests do not become barren with constant cutting of trees for fuel purposes.
They hoped that with the availability of 800 metric tons more Liquid Petroleum Gas in the coming months, the country would not be as badly hit by the upward trend of oil prices in the international market as other developing countries are likely to be affected in the coming winter.
The sources were hopeful that there would be more than Rs 2.5 billion new investment in LPG, CNG and gas sectors, this year.
The Ministry of Petroleum and Natural Resources has already assured the NWFP government and the fertiliser-producing companies that there would be no load shedding of gas during the winter and regular supply would be maintained. Earlier, natural gas was supplied to the fertilizer-producing plants for only nine months, every year.