Petroleum prices in the country are linked with international rates and they will be raised or reduced in accordance with them, Adviser to the Prime Minister on Petroleum and Natural Resources Dr Asim Hussain said on Saturday.
Talking to newsmen after speaking at a meeting of Karachi Chamber of Commerce and Industry (KCCI), he said that as a minister of petroleum, he had no role in fixing POL prices, adding that this was the responsibility of the Oil and Gas Regulatory Authority (Ogra), which determined oil prices on the basis of rates in the international markets.
Expressing fears of possible shortage of gas during this winter, he said that the situation would improve by next year (2013), as the ministry "is moving on the right track as far as gas management is concerned". He said a long-term solution had been worked out to help overcome the gas shortage troubling the fertiliser industry. Small and marginal fields and low generating value gas would be provided to fertiliser firms to reduce their dependence on SSGC and SNGPL.
The adviser said that nearly 400 million cubic feet per day (MMCFD) of gas will be added to the system by November 2012 and the country' s total production will increase to about 5 billion cubic feet per day (BCFD) by the middle of the next year from the current 4.3 BCFD after the completion of some ongoing schemes.
The adviser said that country needed more oil refineries, adding that oil production was also likely to increase within a year to about 100,000 barrels a day from the current output level of about 67,000 barrels. He said that it would help meet at least "25 percent of total domestic oil requirement of 380,000 barrels".
Commenting on the demand for withdrawing Gas Infrastructure Development Cess (GIDC), he said it had been imposed by parliament and only parliament was empowered to withdraw or reduce it. However, he assured that he would pass on the business community's concerns to members of parliament. However, he was of the view that GIDC was needed for development of gas infrastructure such as LNG, LPS, and Pakistan-Iran pipeline etc. Disagreeing with Zubair Motiwala's contentions on gas, he said that the gas price in Bangladesh was less then Pakistan as it only supplied gas to industries, adding that there was no gas for homes, CNG stations or other proposes.
"If we stop gas supply to CNG stations and domestic consumption, we can also provide gas at rates much below Bangladesh. "If you are interested in making gas price comparison then cite the example of India where gas was more expensive than Pakistan," he added. He said that new gas fields discovered in 2012 would be notified by Monday, adding that windfall levy had been reduced from 50 to 40 percent and the levy would be equally shared by federal and provincial governments.
Federal Minister for Climates Change, M Farooq Saeed emphasised the need for increasing support price of cotton lint. He said that cotton farmers were facing enormous financial problems because of abnormally low prices and they might give up sowing the crop if prices were not increased. He was of the view that the textile sector might face a serious crisis if cotton farmers decided to sow other crops for better financial returns.
He said over three and four million people had lost their jobs because of electricity shortage over the past year. According to him, the price of fertilisers had been increased from Rs 700 per bag to Rs 1,700 although fertiliser companies were getting gas at subsidised rate. Former KCCI president Zubair Motiwala said that Sindh produced 2,794 MMCFD gas but was consuming just 39.37 percent against Punjab which was producing just 189 MMCFD gas and consuming 1,880 MMCFD.
He said that the Constitution now guaranteed the right of ownership of 50 percent oil and gas to provinces. He wondered why Sindh was facing gas load shading and shortage. He demanded that all zero-rated sectors, which contributed almost 75 percent of total exports, should be exempted from gas cess. He also called for providing uninterrupted supply to industries so that they could survive in the international market.
Leader of BMG group Siraj Kassim Teli emphasised the need for preparing a charter of economic revival in consultation with the business community. Criticising the government for bad law and order situation in Karachi, he said that it appeared that the government did not exist in the Sindh metropolis.
A large number of people, he said, were being killed out in the streets and no government functionary be it the President, Prime Minister, Interior Minister, Governor or the Chief Minister was doing anything to redress the situation. He wondered why was it that if the top government official did notice of the security situation, the killings increased.