A parliamentary panel was informed on Monday that fluctuation in prices of liquefied natural gas (LNG) during spot purchase is much higher than LNG purchase under long-term commercial agreements. Senate Standing Committee on Petroleum met under Senator Mohsin Aziz and discussed six-point agenda including increasing prices of LNG.
Pakistan has signed long-term LNG commercial agreements with both Pakistan State Oil (PSO) and Pakistan LNG Limited (PLL) separately. Pakistan State Oil signed two long-term commercial agreements with Qatar and Gunvor and PLL also has long-term agreement with LNG Company ENI and Gunvor, besides spot purchase tenders in the international market.
Members of the committee questioned regarding fluctuation in the procuring prices of LNG from April 2018 to July 2019 by both PSO and PLL. The official replied that there was more fluctuation in the prices of spot purchase of LNG as compared with LNG supplied under long-term deals.
Chairperson Oil and Gas Regulatory Authority (Ogra) Uzma Adil Khan informed the committee that the authority has the mandate to review LNG prices monthly and later notify the prices following the directives of Economic Coordination Committee (ECC).
She explained that the total price of LNG for PSO and PLL is calculated under various heads and based on average previous three months prices in international market.
She further revealed that utilised charges of first LNG terminal reduced from $ 272,000 per day to $ 228,000 per day subsequent to improvement in the capacity utilisation of the terminal. She further said that the capacity charges of 2nd terminal are $ 245,000 per day.
The committee discussed a motion regarding increased prices of LNG, which was moved by Senator Sirajul Haq in the Senate and referred to the standing committee on petroleum. Sirajul Haq was not present in the meeting.
Managing Director/ Chief Executive Officer Pakistan Mineral Development Corporation, Sajid Mehmood Qazi clarified that Pakistan did not have any salt export contract with India. However, Indian businessmen buy rock salt from private Pakistani businessmen and sell in the US and European market at higher rates. "Pakistan has not developed the capacity to market the salt in international market and is losing foreign exchange," the MD PMDC informed the committee.
He said that there is no reality in social media reports in this regard as his department has also checked it with Ministry of Commerce. A story has been making rounds on social media that Pakistan has been selling it's pink salt to India at cheap prices and the neighbouring country has been exporting it worldwide and calling it 'Himalayan Salt'. The packaging says that the product is 'made in India'.
He said that the PMDC is exporting low quantity salt around 450 tonnes but private businessmen are exporting around 20,000 tonnes to India businessmen.
In another agenda item, the committee members expressed their serious concerns over increasing accidents in coal mines due to alleged inadequate safety and security measures taken by the mine owners in Balochistan.
The secretary mining Balochistan informed the committee that the death toll as a result of fatal incidents in coal mines in the province is increasing. "Around 21 incidents happened in Balochistan in 2018 in which 66 miners lost their lives, while 53 miners have lost their lives in 39 incidents in 2019," he explained.
He further explained that coal and salt mining sector is regulated under Mining Act 1923, which requires amendment. He added that other factor is presence of unskilled unregistered Afghan workers there.
The managing director PMDC blamed that law and order situation in the province did not allow hiring trainers and trained workers from other provinces for capacity building and training of mine workers. He further blamed the low voltage from WAPDA grids for mining sector in Balochistan is also one of the reasons.
Chairman Pakistan Central Mines Labour Federation, Sultan Khan informed the committee that around 250,000 people are working in mining sector and 150,000 of them are working in Balochistan alone. Social security does not provide cover to coal miners and only 6,634 are registered with EOBI.
He said the situation is not in favour of labour in mining sector as the compensation for the families of miners who lose their lives in Balochistan is much lower than other provinces. He said that rate of compensation is Rs 200,000 in Balochistan, Rs 300,000 in KP, Rs 400,000 in Punjab and Rs 500,000 in Sindh. He said that mining depth and risk in Balochistan is much higher than other provinces. The total death toll in mining sector is 164 and majority of the deceased belonged to Balochistan, he claimed.
Muhammad Abbas Mir, representative of Mining Owners Association, lamented that the government is not providing enough infrastructure for transportation and safety of labourers working in mining sector. "We ourselves are taking steps to keep the coal mining business run and government is not providing any help," he said.