A parliamentary panel will meet on Wednesday to discuss the purchase of liquefied natural gas (LNG) by state-run companies that are importing expensive gas and creating hurdles in the way of LNG import by the private sector.

The Senate Standing Committee on Petroleum will meet at the Parliament House to look into the LNG affairs.

Pakistan LNG Limited (PLL) imported LNG at expensive rates, which led to an investigation by the anti-corruption watchdog.

Moreover, state-run companies like PLL and Sui Northern Gas Pipelines (SNGPL) have also been creating hurdles in the way of gas import by the private sector in a bid to maintain their monopoly over gas marketing and distribution.

Prime Minister Imran Khan-led government had allowed the private sector to import LNG on its own in July last year. The purpose was to create competition and provide gas at cheaper rates to the consumers.

The other objective was to open the market for the private sector to reduce financial risks for the government.

Currently, the government provides guarantees to PLL on LNG import.

The Cabinet Committee on Energy had also decided to allow the private sector to import LNG to make the market competitive. However, despite all efforts, the private sector has not been able to import a single ship of LNG due to the monopoly of state-run gas companies.

The private sector has not only been deprived of LNG import at its own risk but it is also forced to consume expensive LNG. Recently, PLL scrapped bids for five LNG cargoes.

The committee will also seek a briefing on the CNG cylinder blast in Gujranwala. It will discuss safety measures adopted for the use of CNG and liquefied petroleum gas (LPG) in vehicles.

A briefing regarding spot purchase of LNG by PLL and Pakistan State Oil (PSO) will also be given for the months of July and August.

Other agenda includes a briefing about drilling for oil and gas in different parts of Kalat Division. A briefing about safe and commercially viable options in the case of a major future supply disruption is also on the agenda.

The Petroleum Division will provide details of listed/unlisted public sector oil and gas companies along with their management and of Pakistan shareholding in each public sector oil and gas company under the Petroleum Division.

Discussion on the corruption/default case of Hascol Petroleum is also in the agenda. Hascol had made a major default of multibillion rupees.

A briefing will also be given about the increase in margins of oil marketing companies and downstream sector policy revision as well as the projected indigenous gas and imported LNG demand and available quantity in the country.

The parliamentary panel will seek a briefing on why RLNG consumers cannot import LNG for their own use, how many firm and spot agreements have been struck so far by PSO and PLL, who will decide on a spot/short-term basis and who will decide to cancel LNG cargo?

Other questions relate to why the private sector has not yet been given an opportunity to import LNG, which sectors are paying the full price of LNG and which sectors are consuming LNG on subsidy.

Consumers have paid $99 million during the last three years due to idle capacity of an LNG terminal. PLL did not allow the private sector to utilise it to maintain its monopoly due to which the consumers had to bear a burden of millions of dollars.

Published in The Express Tribune, August 25th, 2021.

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